State-owned NHPC would buy back government shares which would yield the exchequer about Rs. 20 billion.
The Empowered Group of Ministers (EGoM) on disinvestment, headed by Finance Minister P Chidambaram, is likely to give its approval to this effect soon, according to a media report.
Under the buyback scheme, the government can raise money by selling its equity in the company to the PSU itself.
The hydro power producer has informed BSE that its board of directors has unanimously approved the buyback of up to 10 per cent of fully paid-up equity shares of Rs 10 each for an aggregate amount of nearly Rs. 24 billion. Since the government holds 86.36 per cent stake in NHPC, buyback of shares on proportional basis would mean government getting about Rs. 20 billion.
The company has a cash reserve of nearly Rs. 30 billion.
NHPC was listed on the bourses in 2009 after the government divested a 5 per cent stake and the company issued 10 per cent of fresh equity.
The government plans to raise Rs. 400 billion in the current financial year (2013-14) through disinvestment.
NHPC generates 5,702 MW of electricity from 17 hydel stations in the country. As many as seven power stations totalling 4,095 MW of capacity are under construction.
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