Placing of up to 64,515,000 new Ordinary Shares (7524A)
February 04 2011 - 1:27PM
UK Regulatory
TIDMOPG
RNS Number : 7524A
OPG Power Ventures plc
04 February 2011
OPG Power Ventures plc ("OPG", the "Company", or the
"Group")
Placing by Cenkos Securities plc of up to 64,515,000 new
Ordinary Shares of 0.0147p each at a price of 93 pence per
share
The Company is pleased to announce today that it has raised,
subject to certain conditions, up to GBP60 million (before
expenses) through the placing of up to 64,515,000 new ordinary
shares by Cenkos Securities plc (the "Placing"), which will be used
by the Group to fund capacity expansion and for general corporate
purposes. The Group currently has 107 MW in operation and,
following the Placing, will have the funding to build out a further
555 MW of capacity, which the Directors believe, positions the
Group to deliver on its strategy of having 1,250 MW of operational
capacity by 2015.
The Placing is conditional, inter alia, upon the passing of a
special resolution by shareholders to authorise the Directors to
allot the Placing Shares for cash on a non-pre-emptive basis.
Accordingly, an Extraordinary General Meeting is being convened on
28 February 2011. A circular containing the details of these
proposals will be posted today.
Background to and reasons for the Placing
As noted in the Company's interim results, the six month period
between April 2010 and October 2010 witnessed India's industrial
production growing at over 9 per cent. on an annualised basis. At
the same time, the Government of India's Eleventh Five year plan,
which covers the five year period to 2012, continues to see
additional capacity come on stream but at slower rates than
targeted. As a result, significant demand is being placed on
India's infrastructure and the Indian power market continues to be
characterised as one of rising demand with unmatched capacity. The
Directors expect these conditions to persist over the next few
years.
The Directors believe that this backdrop of power deficits is
one in which OPG is well placed to create significant value for
shareholders through the building of additional capacity.
Accordingly, the Directors intend to increase the Company's
capacity from the current 107 MW of operational capacity to 1,250
MW by 2015 through the construction of plants located in India's
industrial heartlands.
The Group has commenced work on an additional 383 MW of
capacity, consisting of the second 77 MW module in Chennai and the
300 MW (2 x 150MW) plant in Kutch, as well as the addition of 6MW
to its gas fired 19.4MW plant. The development of these plants is
progressing in line with management's expectations.
The Group's existing 19.4MW gas fired facility, its 10MW waste
heat plant and its 77MW thermal plant continue to perform well and,
as announced in its interim results, the Group intends to extend
its Chennai plant with a further 2 x 80MW units, with commissioning
expected to take place in 2013. The Directors intend to use the net
proceeds of the Placing to fund the entire equity financing of this
additional 160MW in Chennai and for general corporate purposes, as
well as to replenish the cash resources used to fund the
acquisition of the site at Karnataka announced on 25 January
2011.
Current trading and prospects
On 25 January, OPG announced that it had acquired 120 acres of
land in Karnataka with potential for the construction of a 250-300
MW power station, together with an in-situ, partially constructed
12 MW thermal power plant and associated infrastructure. The
Directors expect the 12 MW plant to be commissioned during 2012 and
are evaluating the development of a 250-300MW plant.
At the same time, the Group announced that it is increasing
production at its 19.4MW gas plant in Tamil Nadu by a further 6MW.
The necessary equipment has been ordered and the additional
capacity is expected to be commissioned by June 2011.
On 17 January 2011, the Company announced that it had entered
into a Memorandum of Understanding with the Government of Gujarat
for the development of 5,400 MW of generation capacity, of which
1,400 MW is to be gas based. With its existing plants operating
well, its additional plants under construction progressing as
planned and with a strong pipeline, the Directors believe that OPG
is well placed to achieve its long term goal of becoming a supplier
of choice in the Indian power generation sector.
The Placing
The Company proposes to raise GBP60 million (before expenses)
through the issue of the Placing Shares at the Placing Price, which
represents a discount of approximately 5.6 per cent. to the closing
middle market price of 98.5p per Existing Ordinary Share on 3
February 2011, being the last practicable date prior to the
publication of this document. The Placing Shares represent
approximately 18.3 per cent. of the Company's enlarged issued
ordinary share capital immediately following Admission.
Application will be made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM. It is expected
that Admission will occur on 1 March 2011.
The Placing Shares will, when issued, rank pari passu in all
respects with the Existing Ordinary Shares including the right to
receive dividends and other distributions declared following
Admission.
Further details of the Placing are contained in the circular to
shareholders to be sent today.
Arvind Gupta, Chief Executive of OPG commented,
"We are delighted with the support for the Placing shown by new
as well as existing investors. The funds raised will allow us to
execute our planned strategy to substantially increase the number
of our projects and our generating capacity at a time when India
faces a significant shortfall of supply versus demand. We intend to
become a supplier of choice in the Indian power sector".
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
This document posted to Shareholders 4 February 2011
(by first class post)
Latest time and date for receipt of 12.00pm. on 26 February
Form of Proxy 2011
Extraordinary General Meeting 12.00pm on 28 February
2011
Admission and dealings in the Placing 8:00 a.m. on 1 March
Shares expected to commence on AIM 2011
Where applicable, expected date for 1 March 2011
CREST accounts to be credited in respect
of the Placing Shares in uncertificated
form
Where applicable, expected date for By 8 March 2011
posting of share certificates for
Placing Shares
For further information, please visit www.opgpower.com or
contact:
OPG Power Ventures plc
Arvind Gupta (Managing Director) +91 (0) 44 429
11 222
V. Narayan Swami (Finance Director) +91 (0) 44 429
11214
Martin Gatto (Senior Non Executive +44 (0) 7778 749
Director) 223
Cenkos Securities (Nominated Adviser +44 (0) 20 7397
& Broker) 8900
Stephen Keys/ Camilla Hume
Tavistock Communications +44 (0) 20 7920
3150
Simon Hudson / Sonya Williams
This information is provided by RNS
The company news service from the London Stock Exchange
END
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