Placing New Shares Raising ?39.5m
6 March 2012
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL.
KSK Power Ventur plc
("KSK" or "the Company")
Placing new shares raising £39.5 million
KSK Power Ventur plc (KSK.L), the power project company listed on the London Stock Exchange with interests in multiple power plants and businesses across India, is pleased to announce that it has successfully placed approximately £39.5 million of new Ordinary Shares through its broker, Arden Partners plc ("Arden").
Equity placing
The Company has raised £39,465,166 (before expenses) by way of a placing (the "Placing") by Arden of 7,589,455 new Ordinary Shares of £0.001 each in the capital of the Company (the "Placing Shares") with institutional investors at a price of 520 pence per share (the "Placing Price"). The Placing Price is at a discount of 5.0 per cent. to the closing middle market price of the Ordinary Shares of the Company as derived from the daily Official List of the London Stock Exchange on 5 March 2012, the latest date prior to the announcement.
The Placing is conditional, amongst other things, on admission of the Placing Shares to the standard segment of the Official List maintained by the Financial Services Authority and to trading on the main market for listed securities of the London Stock Exchange plc ("Admission"). It is expected that Admission will occur, and dealings in the Placing Shares will begin, at 8 a.m. on 12 March 2012.
The Placing Shares will represent approximately 5.0 per cent. of the enlarged share capital of the Company on Admission. The Placing Shares will, when issued, rank pari passu in all respects with the other Ordinary Shares then in issue, including the right to receive all dividends and other distributions with a record date falling after Admission.
Pursuant to the terms of the Placing Agreement, Arden has agreed to use its reasonable endeavours, as agents for the Company, to place the Placing Shares at the Placing Price with certain institutional investors. The Placing Agreement contains warranties from the Company in favour of Arden in relation to, inter alia, certain matters relating to the Company and its business. The Placing Agreement is conditional upon, inter alia, Admission occurring on or before 8 a.m. on 14 March 2012.
Following Admission, the total number of Ordinary Shares with voting rights in the Company will be 159,378,600. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, their shareholding in the Company.
Background to and reasons for the Placing
The Company has recently issued its interim management statement for the period from 1 October 2011 to 16 February 2012 (the "IMS") detailing the material events and transactions that have taken place during that period and also the financial position and performance of the Company and its subsidiaries (the "Group").
The IMS contains a review of the Group's power generation assets held through the Company's 74.94 per cent. subsidiary, KSK Energy Ventures Limited ("KSKEV"), which is listed on the Bombay Stock Exchange and the National Stock Exchange. In addition, the IMS refers to the Group consolidating the infrastructure and supply chains to its power production operations with respect to its Mahanadi power plant site by making investments in its mineral resources and cargo movement activities for the movement of coal supplies over rail lines.
The demand for power in India continues to grow and there is a clear requirement for new generation capacity. Notwithstanding increases in renewable and gas fired power generation, the Central Electricity Authority of India ("CEA") expects coal fired power generation capacity to increase from current rates of approximately 108GW to approximately 165GW by March 2017. Some large acquisitions of overseas coal block by Indian companies have been made but the opportunities for importing coal and blending it with domestic coal are still limited. The CEA estimates a demand supply gap of at least 115 million tonnes, assuming maximum blending and required imports. As a result, the Directors expect that Coal India's production, SMDC's blocks and captive coal blocks will play an important role in augmenting domestic coal supplies.
The Group's strategy is to leverage and vertically integrate its operations into the power generation supply chain of the KSKEV power generation portfolio to help ensure fuel security and better pricing for the Group.
Use of proceeds
The Company proposes to use the Placing proceedsto invest in the following projects, in addition to meeting its on-going working capital requirements and pursuing other growth opportunities:
· establishing, constructing and operating a rail line link through the existing State owned rail line and two newly constructed spur lines and a new siding connecting the Gare Pelma coal block and surrounding extensive coal blocks region with the Group's 3.6GW Mahanadi power plant. The overall project cost is expected to be US$240 million with a debt to equity ratio of 3:1;
· working with other government owned mining corporations to help facilitate and provide services in the management and development of mining operations in India; and
· water infrastructure, so as to ensure a water pipeline and storage facilities for the Group's Mahanadi power plant.
Commenting on the Placing Mr. T.L. Sankar, Chairman, said:
"We have been delighted with the strong support from our existing and new shareholders for this placing. The funds will be put towards helping to ensure our coal supplies and water infrastructure for the Mahanadi power plant and helping to develop the mining operations for the Group. With the intrinsic strength of the KSK business model and continuous support of shareholders, we will continue to pursue our next steps with renewed confidence."
For further information, please contact:
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KSK Power Ventur plc Mr. S. Kishore, Executive Director Mr. K. A. Sastry, Executive Director
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+91 40 2355 9922 |
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Arden Partners plc Richard Day / Adrian Trimmings
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+44 (0)20 7614 5917 |
This announcement is for information purposes only and does not constitute an offer to sell or an invitation to subscribe for or a solicitation of an offer to buy or subscribe for any securities in any jurisdiction including in which such an offer or solicitation is unlawful and is not for distribution in or into, without limitation, the United Kingdom, the United Sates, Canada, Australia or Japan (the "Excluded Territories"), or to US persons (within the meaning of Regulations of the United States Securities Act 1933 (as amended) (the "Securities Act").
The Placing Shares have not been and will not be registered under the Securities Act or under the applicable securities laws of any state in the United States or any Excluded Territory and, unless an exemption under such act or laws is available may not be offered for sale or subscription or sold or subscribed directly or indirectly within the Excluded Territories or for the account or benefit of any national, resident or citizen of the Excluded Territories. No public offering of securities will be made in the United States. The distribution of this announcement in other jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.
Arden, which is authorised and regulated by the Financial Services Authority, is acting exclusively for KSK and for no one else in connection with the book building and the Placing and will not be responsible to anyone other than KSK for providing the protections afforded to clients of Arden nor for providing advice in relation to the Placing or the book building or any other matters referred to in this announcement.
Apart from the responsibilities and liabilities, if any, which may be imposed on Arden by the Financial Services and Markets Act 2000 (as amended) or the regulatory regime established thereunder, Arden does not accept any responsibility for the contents, accuracy, completeness and/or verification of this announcement or any other statements made or purported to be made by it, or on its behalf, in connection with the Company, the Placing, the Placing Shares or any other matter referred to in this announcement. Arden disclaims any and all liability (save as referred to above) to Shareholders and any other person in respect of this announcement or such statement.
The contents of this announcement are not to be construed as legal, financial or tax advice. If necessary, each recipient of this announcement should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.
This announcement contains certain statements that are or may be "forward-looking statements". These statements typically contain words such as "intends", "expects", "anticipates", "estimates" and words of similar import. All the statements other than statements of historical facts included in this announcement, including, without limitation, those regarding KSK's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to KSK's products and services) are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and therefore undue reliance should not be placed on such forward-looking statements. There are a number of factors that could cause the actual results, performance or achievements of KSK or those markets and economies to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding KSK's present and future business strategies and the environment in which KSK will operate in the future and such assumptions may or may not prove to be correct. Forward-looking statements speak only as at the date they are made. Neither KSK nor Arden nor any other person undertakes any obligation (other than, in the case of KSK, pursuant to the Listing Rules and the Disclosure and Transparency Rules) to update publicly any of the information contained in this announcement, including any forward-looking statements, in the light of new information, change in circumstances or future events.
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