KVK Group eyes AIM market to raise $100 Mn

By siliconindia   |   Wednesday, 16 January 2008, 17:43 IST
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New Delhi:Hyderabad-based KVK Group is raising $100 million through the Alternative Investments Market (AIM) in London to pump $100 million into various power ventures which are under its privately held group company KVK Energy and Infrastructure (KEI), reported the Economic Times. A new firm S&S Infrastructure Holdings funds has been set up to raise the fund. The new firm would pick up direct equity stake of 70.3 percent in KEI in addition to convertible preference shares in the company. Old Lane a subsidiary of Citigroup hedge fund holds an equity stake of 15.7 percent in KEI. Currently KEI has equity stakes in various power projects under implementation with a cumulative capacity of 2,350 MW. KVK Nilachal Power in Orissa and coal-based Nagai Power located in Tamil Nadu are the two important project of the company. The company is also a minority partner in the 600-MW Lanco Amarkantak Power and in a couple of hydel power projects in Karnataka. S&S would bring in $34.4 million (Rs 137.9 crore) for 70.34 percent equity stake and would also infuse $65.5 million (Rs 262 crore) more through convertible debentures or preference shares. Upon conversion into equity, S&S Infrastructure’s stake shall go up to 94 percent. After S&S Infrastructure acquiring majority stake in KEI, Old Lane’s equity in the company would come down to 4.66 percent from the existing 15.72 percent. The company, however, continue to hold 34 million convertible preference shares and 93 million convertible debentures, which could potentially give it a higher equity in the company when converted. Currently, Maruti Finance, which is the ultimate holding company of the KVK Group led by first-generation entrepreneur K Vijay Kumar, holds 75.29 percent equity in KEI. This holding company’s equity stake would come down to 22.33 percent after the infusion of funds by S&S Infrastructure.