Rain Commodities to sell tax-free bonds

Rain Commodities to sell tax-free bonds
24 March 2010

Rain Commodities Ltd plans to raise US$100m by selling tax-free bonds in two US states.

The Hyderabad-based company wants to deploy the proceeds to set up two power projects of 30MW each at its CPC facilities in the US, vice-president (finance) T Srinivasa Rao said.

Rao said the new global holding company will raise equity funds in the US market through an initial public offering (IPO) whose size and timing were yet to be decided.

The two proposed power projects using waste heat will come up at Robinson in Illinois and at Lake Charles in Louisiana. “Both the states of Illinois and Louisiana have given us approvals to raise US$50m each through issue of tax-free bonds,” Rao told Mint.

The long-tenured bonds, carrying low interest, will be offered by the year-end while it would take two years for the power projects to take off.

Also by the year-end, Rain Commodities will also hive off cement operations into a subsidiary and create a global holding entity in the US for its CPC business as part of a corporate restructuring drive.

“The proposed hiving off of cement business into a wholly owned subsidiary will not only facilitate induction of strategic joint venture partners into the cement business but also facilitate any value accretive acquisitions in the cement business,” managing director N. Jagan Mohan Reddy said.
Published under Cement News