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Mumbai:
The public sector Bharat Heavy Electricals Ltd (BHEL) has floated
Rs 300-crore secured bonds with the option to retain Rs 200 crore
if oversubscribed.
The tenure is of seven years with a put-and-call option after five
years. The coupon is between 8.60 and 9.20 per cent. This is the
first time that BHEL has tapped the market to raise funds through
the issue of bonds.
The issue opened on 2
November and will close on 8 November. The bonds have been rated
AAA by the Credit Rating Information Services of India Ltd (Crisil)
and LAAA by the Investment Information and Credit Rating
Agency Ltd (ICRA).
The funds thus raised
will be utilised by BHEL for working capital requirements,
modernisation and upgradation and to meet fund requirements of
voluntary retirement schemes (VRS).
BHEL, as a cost-cutting
measure, had downsized its staff from around 48,000 to 62,000
through VRS between 1999 and September 2001. The company had to
pay Rs 480 crore
under the scheme.
The highest safety ratings of the
bonds are ascribed to BHELs strong position in the domestic
power plant and heavy engineering sectors. The company has
adequate order book to support a moderate growth in turnover in
the next two to three years.
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