5 April 2017
OPG Power Ventures plc
("OPG" or the "Company")
Amendment of Share Capital Rights in OPG Gujarat to address payment delays by state electricity companies
OPG, the developer and operator of power generation plants in India, announces amendments to the share capital rights at its subsidiary, OPGS Power Gujarat Private Limited ("OPG Gujarat"), which owns and operates the 2 x 150 MW power plant at Kutch, Gujarat.
As reported previously, the Gujarat State Distribution Companies (the "Discoms") have been delaying payment to OPG Gujarat of monies collected by them from captive customers of OPG Gujarat who are located in the state. Currently, OPG Gujarat makes its direct sales to industrial users ("Captive Users") under Group Captive Regulations, which stipulate that those Captive Users should own at least 26% of OPG Gujarat's equity share capital with voting rights. OPG Gujarat issues different classes of shares to Captive Users and to OPG with equal voting but varying economic rights. Following constructive dialogue with the Discoms, management has determined that an amendment to the share capital rights of Captive Users - such that their economic and voting rights are aligned - will help in accelerating the recovery from the Discoms of delayed payments.
This amendment of share capital rights at OPG Gujarat, which will result in an increase in Captives Users' non-controlling interest in OPG Gujarat, is not expected to have an impact on the consolidated results after tax or the consolidated cashflows of OPG and its subsidiaries and is expected to lead to a marginal increase in the Company's reported earnings per share in the near term, whilst OPG Gujarat continues to ramp up. Thereafter, management expect the impact upon the Company's reported earnings per share to be neutral. The Company's operational and management control and its majority shareholder status at OPG Gujarat will remain unaffected. In addition, the Company's dividend policy, which is based on a pay-out ratio of its post-tax result and its cash flows, is not expected to change as a result of this amendment to share capital rights at OPG Gujarat.
OPG Gujarat is implementing the necessary corporate resolutions and court approvals to align the economic and voting rights of its shareholders as described above to be effective from when group captive sales commenced in April 2015.
For further information, please visit www.opgpower.com or contact:
OPG Power Ventures PLC Arvind Gupta / V Narayan Swami Ajay Paliwal / Pooja Maru |
+91 (0) 44 429 11211 +44 (0) 207 850 7070 |
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Cenkos Securities (Nominated Adviser & Broker) Stephen Keys / Camilla Hume |
+44 (0) 20 7397 8900 |
Macquarie Capital (Europe) Limited (Joint Broker) Raj Khatri / Nick Stamp |
+44 (0) 20 3037 2000 |
Tavistock (Financial PR) Simon Hudson / Barney Hayward / James Collins |
+44 (0) 20 7920 3150 |
About Group Captive Power Plants
OPG Gujarat operates as a Group Captive Power Plant ("GCPP") in terms of the regulations (the Electricity Rules 2005) issued under the Electricity Act 2003. As outlined in the Company's Admission Document, dated 23 May 2008, there are regulations prescribed by the Ministry of Power that govern GCPPs which include, amongst other things, that the captive users must hold at least 26% equity share capital with voting rights and consume at least 51% of the annual power output from the plant.
About OPG
OPG operates and develops power generation related assets in India and at 30th September 2016 had 750 MW of assets with a further 186 MW under development or in pipeline. In the six months ended 30th September 2016, according to its unaudited results for the period, the Company generated revenues of £118 million, EBITDA of £41 million, profit before tax of £18 million.
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