Gipcl Plans Rs 50cr Preference Issue

The Gujarat Industrial Power Corporation Ltd (GIPCL), which plans to set up a lignite-based pithead power plant of 2 x 125 megawatts, has decided to issue non convertible redeemable preference shares of Rs 50 crore with a greenshoe option of Rs 25 crore. The company decided to pay a dividend of 13 per cent for three years and 13.5 per cent for five years, said sources. The issue is expected to open for subscription on May 15. The proceeds of the issue will be used to part-finance the lignite power project at Surat. The cost of the power project is Rs 1,500 crore of which the power project constitutes Rs 1,202 crore, while the lignite project is worth Rs 298 crore. Since the instrument is not rated it will deemed as unsecured paper and thus will not be listed at any exchange. Sources said that the company is expected to meet the financial closure by the end of August this year.