The Hindu Business Line : KPFC bonds issue over-subscribed

KERALA Power Finance Corporation (KPFC), a joint venture of the State Government and Kerala State Electricity Board (KSEB), has raised Rs 300 crore through private placement of bonds with an over-subscription of Rs 7.40 crore.

The issue, which opened on June 19, 2003 with a coupon rate of 10.25 per cent and a maturity period of seven years, was closed on July 8, much ahead of the closing date of September 1.

The issue, aggregating Rs 150 crore with a green shoe option of Rs 150 crore and a put/call option after five years, is supported by unconditional and irrevocable guarantee from the Kerala Government and has a credit rating of CARE A(SO) from Credit Analysis and Research.

According to Mr M.P. Aiyappan, Managing Director, KPFC, the coupon rate is one of the lowest ever offered in the country compared with the prevailing rates.

There would be a saving of more than Rs 15 crore for the company by way of interest over a seven-year period when viewed against similar bond issues in the recent past, he added.

The major subscribers to the issue included SAIL, Canara Bank, Dena Bank, Punjab and Sind Bank, New India Assurance Company, Kandla Port Trust, LIC, South Indian Bank, Allahabad Bank, Indian Oil Corporation and Karnataka Bank.

KPFC has so far disbursed Rs 610.60 crore as loans to the power sector.

During 2001-02 and 2002-03, it declared dividend of Rs 34.31 lakh and Rs 38.15 lakh respectively.

The company has been consistently making profits since inception and returned a net profit of Rs 2.35 crore last year.

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