RURAL ELECTRIFICATION CORP TO RAISE RS 3,200 CRORE

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DC RURAL ELECTRIFICATION CORP TO RAISE RS 3,200 CRORE, FPO LIKELY IN JANUARY 2010 fund raising market Consider ing the current market situation, the company is hoping to fetch about Rs 2,900 crore through premium to be decided later.

Stateowned Rural Electrification Corp on Friday said its follow-on public offer (FPO) to raise Rs 3,200 crore is likely to come up by January, 2010.

"The FPO can be expected by the end of January, 2010," company's director (finance), Mr H. D. Khunteta said.

The company would utilise the funds from the FPO to disburse loans to power projects. REC is likely to get Rs 2,400 crore from the total proceeds of the FPO and the government would get Rs 800 crore, Mr Khunteta said.

REC would issue about 17 crore shares of Rs 10 face value each.

Considering the current market situation, the company is hoping to fetch about Rs 2,900 crore through premium to be decided later.

Earlier, REC had requested the power ministry to raise fresh equity of 20 per cent of the existing capital of Rs 858 crore either through Qualified Institutional Placement (QIP) or FPO.

Earlier, according a report Mr P. Uma Shankar, CMD, REC said that, "Our target for the current year was Rs 20,000 crore. We have already raised Rs 11,000 crore from different sources."

He added that "The rest of the money will be raised from domestic sources and even through the external commercial borrowing route if the markets improve." Mr Shankar said that REC had set a target of sanctioning projects worth over Rs 40,000 crore in the current financial year and the company has already sanctioned around Rs 30,000 crore.

He added that "We also have small loans from the German government-owned development bank KfW and the Japan Bank of International Cooperation. We have two lines of credit of 70 million each from KfW and JBIC."