REC plans to raise Rs 4,500 cr through FCCBs

Rural Electrification Corp (REC) has approached the Power Ministry seeking approval for raising up to $1 billion (about Rs 4,525 crore) through issue of Foreign Currency Convertible Bonds (FCCBs).

State-run REC offers finance for various power projects, especially for rural electrification initiatives.

"We have approached the Power Ministry for raising $1 billion through issue of FCCBs. We approached the ministry about a month back," REC Chairman and Managing Director HD Khunteta said here today.

The company plans to raise about Rs 28,000-30,000 crore (more than $6 billion) in the current fiscal. Out of the total target, around $1.5 billion would be mopped up from international markets.

Khunteta said the company would soon be signing up an agreement with a group of lenders for raising loans worth $300 million this week.

Lenders, including Bank of Tokyo-Mitsubishi UFJ and Mizuho Financial Group, have been appointed by the company to raise $300 million through loan syndication.

Further, the company would be tying up loans of $250 million from State Bank of India, he noted.

REC expects to raise $200 million through Swiss franc bond issue. The road shows for the same are expected to happen in early September.

The mandate for the Swiss franc bond issue has been given to four banks, namely UBS, Credit Suisse, RBS and Deutsche Bank.

According to Khunteta, the company would seek regulatory approvals for raising another $750 million during this fiscal from overseas markets.