CESC to raise $150M through private placement

RP Sanjiv Goenka group's flagship power generation and distribution company, CESC, has decided to raise up to $150 million or about Rs 913 crore through a private placement.The board of CESC today approved the proposal, the company said in a filing to Bombay Stock Exchange (BSE).

The filing said, the board has has resolved to issue offer and allot “equity shares / fully convertible debentures / partly convertible debentures / non-convertible debentures with warrants / any other securities (collectively referred to as 'QIP Securities’) to Qualified Institutional Buyers (‘QIBs').”

The board has also decided to hold a general meeting of the members of the company for the purpose on October 18, 2014.The discloser on the stock exchange does not say how the company would utilise the resources.

“We are raising up to Rs 900 crore. We see a lot of opportunities in the power sector. This will be used for the company's growth in the power sector,” CESC chairman Sanjiv Goenka told Business Standard.

The company had earlier appointed Boston Consulting Group to explore opportunities and advise on the verticals of power sector that the company could focus on.

“The investment will be institutional, both national and international,” he added. Goenka did not disclose the identity of the investors. However, following this, there will minor dilution of promoter's stake in CESC, which also has a presence in the retail space via Spencer's. The promoter's holding in the company is currently at 52.48 per cent.

The shares of the company today ended at Rs 766.10 on Bombay Stock exchange (BSE), down 2.28 per cent from the previous close.