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Jaiprakash Ind to seek nod for investment in subsidiary

K.R. Srivats

NEW DELHI, July 31

JAIPRAKASH Industries Ltd (JIL) will seek shareholders' nod at the forthcoming AGM on August 27 to invest an aggregate amount of up to Rs 138 crore, in one or more tranches, in the share capital of its subsidiary company Jaiprakash Hydro-Power Ltd (JHPL) .

JHPL is implementing the 300-MW Baspa-II Hydro Electric Project on a build-own-and-operate basis.

The project cost has been estimated at Rs 1,620 crore, out of which Rs 486 crore will be funded through equity and the balance Rs 1,134 crore through loans.

JIL will be required to bring in Rs 351 crore as its equity contribution in JHPL and the balance Rs 135 crore would be infused by ICICI. According to the AGM notice, the company has invested Rs 213 crore in the equity capital of JHPL. JIL has also paid R s 7 crore as share application money against which allotment is yet to be made.

ICICI has invested Rs 75 crore in the capital of JHPL.

The shareholders' approval is now being sought as the proposed investment will be in excess of the limits prescribed under Section 372 A of the Companies' Act, 1956.

JHPL was a wholly-owned subsidiary of JIL and the provisions of 372 A were not applicable for investments made by JIL in it. Consequent to the equity participation of ICICI in JHPL, it ceased to be a wholly-owned subsidiary of JIL. The provisions of Sect ion 372 A are now applicable for JIL's investment in JHPL.