B Surender Mohan, CMD of Neyveli Lignite says PSU has received a letter from the Department of Disinvestment (DoD) on five percent stake sale in the company.
"We have given a commitment to the government that in the first quarter, i.e. April-June, we will be going in for disinvestment by convincing our people," he told CNBC-TV18 in an interview.
Below is verbatim transcript of his interview on CNBC-TV18
Q: Could you update us on whether there has been any intimation from the divestment department or the government to you on the issue of disinvestment?
A: There was a letter from DoD to disinvest about 5 percent of our shares. Our present paid up capital is Rs 1677 crore. So, 5 percent disinvestment is being mooted out. There was so,me resistance from our unions and association as they are afraid that more disinvested. As per the Securities and Exchange Board of India (SEBI) requirement minimum 10 percent has to be public holding. In that aspect we are convincing our associations and unions.
We have given a commitment to the government that in the first quarter, April-June we will be going in for disinvestment by convincing our people. I think everything should go through because it is a basic requirement as per the guidelines.
Q: We do understand that your company is looking to raise generation capacity quite significantly over the next 5 -7 years, with work having started on some of these projects. Have you been assured of the coal linkages for these projects? Many of your peers including NTPC are still not adequately covered in this aspect, despite power purchase agreement (PPAs) etc in place?
A: We are basically lignite mining and power generation we are doing it, because the lignite resources are not much comfortable for opencast mining due to the depth of lignite deposits; more than 75 percent are below 150 metre depth. So, in the present technology it is very difficult to mine lignite. We wanted to go for diversification because the growth of company is important. As a part of diversification we want to enter into the coal based power plants.
We have already gone for a coal-based power plant at Tuticorin, which is 2X500 megawatt. Further we are going to get the coal from Mahanadi Coalfields Limited (MCL). Although the letter of intent (LOI) is there, we are locked up because of some forest clearances from the Tuticorin project but that will be sorted out very soon. We are already into the project and we have already spent more than Rs 3700 crore for the plant.
First unit is going to be commissioned in December 2013, which is a positive sign. Linkage is already there with MCL. We are going to sign fuel supply agreement (FSA) shortly once the forest clearance is awarded. The balance we have to import. We are also applying for some coal blocks which have been recently put on the website for coal-based power plant.
Our Uttar Pradesh project, which is totally dependent on the coal-based power plant and it a 3X660 megawatt costing around Rs 14500 crore. Once we get Ministry of Environment and Forests (MoEF) clearance, we watch over for the government sanction and within a month we may get all the clearances. So then within six months, we will be placing the orders for 3X660 megawatt which is a joint undertaking between NLC and Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL). NCL share is 12 percent.
Q: Your biggest challenge for the company remains increasing debtor days and receivables, especially from the Tamil Nadu electricity board (TNEB), which is your key client. What is the current receivable situation at the end of December quarter and by when are you looking to recover a large part of this debt?
A: As on January 31, our total dues are Rs 4,450 crore from various DISCOMS Out of that Tamilnadu Generation and Distribution Corporation Ltd (TANGEDCO) is around Rs 3,475 crore. We are pursing with all the officials of state and also the chairman and managing director (CMD) of TANGEDCO. We have also written letters to the chief secretary of Tamil Nadu to sort out the issue.
I hope we will be able to sort out these issues and getting these dues because they are having some programme of restructuring. We hope some positive results will come in a short time regarding getting the dues from the Tamil Nadu government.
Q: Can you just leave us with some guidance for FY13 for the topline as well as for the bottomline?
A: For the last quarter we have achieved turnover growth of 20 percent and profit after tax (PAT) also about 19 percent. We also had a growth of generation in lignite production and power generation. All this will lead to growth regarding physical performance. With regards to our financial performance, we will have to control our expenditures so that we may have similar profits like last year.
We are more than 1000 million units in the generation and about 12 lakh tonnes in lignite production compared to last year as on date. So there is a growth. We are hopeful of getting good results this year also.