JP Associates may sell stake in JPVL next yr
Jaypee Associates may mobilise up to $500m through equity sale in Jaiprakash Power Ventures (JPVL) in 2011, said a senior company official.
By Rajas Kelkar, ET Bureau |
MUMBAI: Jaypee Associates may mobilise up to $500m through equity sale in Jaiprakash Power Ventures (JPVL) in 2011, said a senior company official. The holding company for power is adequately funded for executing projects till October 2011, said Rahul Kumar, CFO, JP Associates. The construction and energy company could also look at opportunities to refinance debt.
"We have not decided the mode of the equity fund raising yet. It may be too early to engage an advisor," said Mr Kumar, adding that the company would like to bring down the debt-equity ratio of the company to less than 1.5 from 2. He said that the debt-equity ratio would decline over the next three years with cash generation from projects under implementation. "We expect the ratio to decline as power projects go on stream and the new cement capacity takes the total output to 37m tonnes," he said.
Jaypee Associates has total debt of close to 35,000 crore. The average cost of borrowing is close to 10%. He said that the company could look at refinancing opportunities to bring down the cost of funds and that borrowing from overseas was also an option.
Kumar also said that the company's revenue growth will be driven by the EPC and cement businesses. He said that the company's EPC order book was 60,000 crore. In case of cement, he felt that the sector would continue to see consolidation and Jaypee Associates could be a consolidator.
"There could be a couple of players who could exit and if there is an opportunity , both foreign and local companies could be interested," he said.
The company told analysts in a conference call on Tuesday that it is looking to increase total cement capacity to 37.2m tonnes by the end of March 2012 from 22.5m tonnes currently. The company also expects installed power generation capacity to go to 7,800 mw over the next 5 years from 700mw currently. The company expects to invest over 30,000 crore in power projects over the next 5 years. Jaypee Associates market cap is 29,387 crore.
"We have not decided the mode of the equity fund raising yet. It may be too early to engage an advisor," said Mr Kumar, adding that the company would like to bring down the debt-equity ratio of the company to less than 1.5 from 2. He said that the debt-equity ratio would decline over the next three years with cash generation from projects under implementation. "We expect the ratio to decline as power projects go on stream and the new cement capacity takes the total output to 37m tonnes," he said.
Jaypee Associates has total debt of close to 35,000 crore. The average cost of borrowing is close to 10%. He said that the company could look at refinancing opportunities to bring down the cost of funds and that borrowing from overseas was also an option.
Kumar also said that the company's revenue growth will be driven by the EPC and cement businesses. He said that the company's EPC order book was 60,000 crore. In case of cement, he felt that the sector would continue to see consolidation and Jaypee Associates could be a consolidator.
"There could be a couple of players who could exit and if there is an opportunity , both foreign and local companies could be interested," he said.
The company told analysts in a conference call on Tuesday that it is looking to increase total cement capacity to 37.2m tonnes by the end of March 2012 from 22.5m tonnes currently. The company also expects installed power generation capacity to go to 7,800 mw over the next 5 years from 700mw currently. The company expects to invest over 30,000 crore in power projects over the next 5 years. Jaypee Associates market cap is 29,387 crore.
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