Chettinad Cement to fund associate co's power project

Chettinad Power is setting up a Rs 8,500-cr super critical thermal power plant in Nagapattinam district of Tamil Nadu

BSE-listed Chettinad Cement is planning to invest around Rs 1,300 crore by way of equity in its associate company Chettinad Power Corporation, which in turn would use the fund to set up a Rs 8,500-crore super critical thermal power plant in Tamil Nadu.

In a communication to the shareholders, the company said it had received a proposal from Chettinad Power Corporation Private Ltd seeking investment in its equity share capital for a supercritical thermal power project of 1320 Mw (660 Mw x 2) at Tharangambadi Village in Nagapattinam district.

The estimated cost of the project is Rs 8,500 crore and the company proposed to fund a part of the cost through equity share capital to the extent of Rs 2,100 crore.

The associate company had sought Rs 1,300 crore from Chettinad Cement over a period of four years commencing 2012-13. The balance equity portion would come from the other group companies, said a company senior official.

By investing in the shares of such a project, the company would be in a position to leverage the business opportunity in the power sector, it stated in its annual report.

The company is constantly on the look out for avenues to ensure steady, continuous supply of coal and at reasonable prices. The management has identified some major suppliers of coal in bulk as well as coal mines internationally.