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Andhra Power Corp to raise Rs 5,000 cr for financing power sector reforms


Devdiscourse News Desk hyderabad India
Updated: 05-02-2019 19:16 IST
Andhra Power Corp to raise Rs 5,000 cr for financing power sector reforms

The AP Power Finance Corporation has decided to raise funds by issuing redeemable non-convertible power bonds for Rs 2,000 crore with a green shoe option of Rs 3,000 crore through private placement. Image Credit: Reuters

Andhra Pradesh Power Finance Corporation, set up to support and augment the resources for financing the power sector reforms in the state, is in the process of raising Rs 5,000 crore through bonds, a senior official said Tuesday. ''The state government has given permission to raise Rs 5,000 crore through bonds...We are expecting to raise the power finance bonds by February 20,'' chairman and managing director of Transmission Corporation of Andhra Pradesh Limited K Vijayanand, told PTI.

He said the number of tranches for raising the amount would depend on the response from buyers. The AP Power Finance Corporation has decided to raise funds by issuing redeemable non-convertible power bonds for Rs 2,000 crore with a green shoe option of Rs 3,000 crore through private placement, with an unconditional and irrevocable guarantee by the state, another senior official said.

Brickwork Ratings, a SEBI-registered credit rating agency, has assigned provisional BWR 'AA' (SO) (Stable) ratings for the proposed bonds which would have a tenor of up to 10 years under seven different sub-series. BWR said it believes the financial profile of the Andhra Pradesh government (guarantor for the issue) would be maintained over the medium term.

The 'stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'positive' in case the revenue receipts or the fiscal position of the state show sustained improvement. The rating outlook may be revised to 'negative' if the revenue receipts or the fiscal position of the state go down lower than the expected figures, Brickwork said.

(With inputs from agencies.)

COUNTRY : India

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