Ipcl To Place Rs 450cr Ncds For Gandhar

Indian Petrochemicals Corporation Ltd (IPCL) is privately placing non-convertible debentures worth Rs 450 crore to part-finance its expansion project.

The money raised will be used to fund second phase of the Rs 2,000-crore Gandhar petrochemical complex.

The 14.25 per cent secured non-convertible debenture placement will complete financial closure for the project. Ninety-nine per cent of funds required for Gandhar will be tied-up after this issue. We might just need some Rs 50-75 crore later, said sources.

The Rs 300-crore issue, with a greenshoe option of Rs 150 crore, will be one of the largest private placements of debt since the Rs 500-crore SAIL issue two weeks back. The issue will hit the market sometime this month. The company is awaiting government approval to make its bonds eligible for investments by religious and charitable trusts under Section 11 (5) of the Income Tax Act, 1961.

 

Merchant bankers say this exception will help the company garner funds more easily as it will appeal to a wider investor base. Provident funds are also allowed to invest in bonds issued by public sector companies.

The AAA-rated petrochemical giant's (Rs 3,102.84 crore net turnover in 1995-96) Gandhar petrochemical complex consists of a 3 lakh ethylene cracker, a 38,000 tonne polypropylene plant, a 2.7 lakh tonne polyethylene plant and a 1 lakh tonne ethylene oxide plant. The entire complex is expected to be ready by December 1998.

Phase one of the project, which costs Rs 1,505 crore, was commissioned earlier this year. This phase consisted of a 1.5-lakh tonne polyvinyl chloride plant, a 65-mw captive power plant, a 1.7-lakh tonne vinyl chloro monomer plant and a 1.3-lakh tonne caustic soda/chlorine plant.

IPCL sources said most of the foreign currency loan for the second-phase has also been tied-up and the proposed placement is to sew up the rupee debt for the project.

The company had raised $175 million abroad through a foreign convertible bond issue earlier this year. Lead managed by Bank of America, the issue received a higher than sovereign rating, first time achievement by an Indian corporate. The issue will also be used to finance the second-phase.

The completion of Gandhar will consolidate IPCL's position in the petrochemical industry where it is already one of the largest players. Its total ethylene capacity will rise to 7 lakh tonnes with 4 lakh tonnes at Gandhar itself.

Ramanathan gets extension

IPCL chairman, K G Ramanathan, has been given a one-year extension by the central government. Ramanathan was supposed to retire on May 30 but will now carry on till May 30 next year. An IPCL spokesperson said the extension was granted sometime last month.