Rpg To Up Equity In Dholpur Unit

The RPG group has decided to reduce the debt equity ratio to 2.3:1 from 2.5:1 and comply with two of the four conditions laid down by financial institutions for financing the Rs 2,300 crore RPG Dholpur Power Company (RDPCL) project in Rajasthan.

The financial institutions had stipulated that the RPG group rework the debt -equity ratio to 2.3:1 from 2.5:1. They had also demanded that the group repay various loans taken from the institutions.

Sources close to RPG group stated that the decision to comply with both conditions had been communicated to the institutions. The first decision will involve bringing in an additional Rs 71 crore as equity into the project. A corresponding amount will be deducted from the debt portion of the project cost.

 

The debt of the RPG group to the institutions involves money owed by two group companies, India Polyfibres and National Infotechnology. The former has been taken over by Reliance. The latter is a joint venture with various Madhya Pradesh government undertakings in which the RPG group has a 40 per cent stake. Sources said that the group had told institutions that it will repay the loans to the extent of its equity participation.

Institutions have sanctioned a loan of Rs 1,010 crore subject to the conditions being adhered to by the RPG group.

The major chunk of the loan is being provided by ICICI--Rs 600 crore. IDBI and IFCI have sanctioned Rs 200 crore each while Rs 10 crore has been sanctioned by GIC.

Sources close to RPG group said that they have already received the sanction letter from ICICI and the loan comes with no strings attached. Another Rs 629 crore will be raised from banks. FI sources said that two other conditions had been laid down for the loan. One is that the group will not make any investments in its basic telecom project in Tamil Nadu.

The other is that the charge on Rajasthan State Electricity Board's (RSEB) escrow account should be shared parri passu with another company Chambal Power.

Sources close to RPG group said that they have not officially heard from the financial institutions on both issues. It is reliably learnt that the RPG group is unlikely to share the first charge on RSEB's escrow account.

The 702 MW naphtha fired power project is being set up by the RPG Dholpur Power Company. The RPG group will hold 35 per cent. Siemens which has bagged the engineering, procurement and construction contract, will hold 15 per cent and 10 per cent will be offered to the operation & maintenance contractor.

The balance 40 per cent will be offered to foreign investors. JP Morgan and I-Sec have been given the mandate for selecting the foreign equity partners. ANZ Grindlays has the mandate for arranging the foreign currency loan.