Power Finance Corporation, which plans to enter the capital market with an intial public offer in June, is considering issuing some private equity to investors in the US and other countries to raise more funds. | |
| The PSU had already initiated discussions with the power ministry for its approval on issuing shares to foreign investors through the private placement route, sources said. |
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| This was likely to take place after the IPO, although there had been no decision as yet on the timeframe or the amount of equity to be offered, sources said. |
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| PFC, a non-banking financial company for funding power sector projects, is planning to issue private equity in the US under rule 144 A of Securities Exchange Commission, the US capital market regulator. |
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| The company is also mulling private placement to overseas investors outside the US market under "Regulation S" (Reg S) guidelines of the Securities Exchange Commission. |
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| The Reg S governs offers and sales made outside the US and allows raising capital in other countries without going through the US securities registration process. |
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| Meanwhile, the PFC has firmed up a tentative timeline for its IPO of 10 per cent fresh equity to raise up to Rs 1,030 crore. Along with the offer, the government will also divest 5 per cent stake in the the company. |
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| The PSU plans to file a draft red herring prospectus with Sebi in mid-March. Depending on the approval of the market regulator, the final red herring prospectus would be filed by the end of april 2006. |
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| The company would begin roadshows and launch the IPO in June and finalise the allotment of shares by the end of the same month. |
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| The combined issue of shares in the offering would be 15.45 crore. The issue is expected to raise a total of Rs 1,500 crore. Of this, Rs 500 crore will go to the government as its share of the proceeds. |
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| Post-IPO, the government's equity in the company will come down to 86.36 per cent from the present 100 per cent. |
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