Power Grid seeks shareholders' nod to raise Rs 13,500 crore

State-owned Power Grid has sought the approval of shareholders to raise up to Rs 13,500 crore by way of private placement of bonds in the current fiscal. The proceeds would be used for capital expenditure.

"It is proposed to raise funds through issue of bonds on private placement basis in one or more tranches/offers up to Rs 13,500 crore but within the approved borrowing limit of Rs 16,500 crore... Depending upon the requirement of funds during the financial year 2014-15," according to the postal ballot notice send to the shareholders.

In March, Power Grid's board of directors had approved raising up to Rs 16,500 crore this financial year (2014-15) to meet capital expenditure requirements.

"The aforesaid amount of Rs 16,500 crore includes a proposed drawal of Rs 3,000 crore from Foreign Currency Committed Loans (FCCL) and Rs 2,000 crore from SBI term loan during the FY 2014-15, leaving untied debt of Rs 11,500 crore.

"However, the actual drawal from SBI and FCCL can be ascertained only in due course of time and any shortfall in drawl from SBI and FCCL will be compensated through raising of additional debt fund from domestic sources through issue of bonds on private placement basis in one or more tranches," the notice said.

Besides, the company has sought shareholders' nod to provide any security or guarantee in connection with loan or any form of debt to provide "inter corporate loan(s) on cost to cost basis and back to back servicing, or a combination thereof, up to an amount of Rs 3,000 crore" to project SPVs acquired by the company under tariff based competitive bidding.

The SPVs are Vizag Transmission Ltd, Power Grid NM Transmission Ltd, Unchahar Transmission Ltd and NRSS XXXI (A) Transmission Ltd.

To ensure successful development of the project SPVs, Power Grid has proposed to render all inputs and services as may be required by them. Shareholders would vote on this proposal also.

At the end of May, Power Grid Corporation of India had 1,08,128 circuit kilometres of transmission lines. It is also into consultancy and telecom segments.