OPG Power Ventures plc Amendment of Share Capital Rights in OPG Gujarat (5972B)

TIDMOPG

RNS Number : 5972B

OPG Power Ventures plc

05 April 2017

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               [phone] 
  Arvind Gupta / V Narayan                     11211 
  Swami                                  +44 (0) 207 
  Ajay Paliwal / Pooja Maru                 850 7070 
 
 Cenkos Securities (Nominated 
  Adviser & Broker)                  [phone] 
  Stephen Keys / Camilla Hume                   8900 
 Macquarie Capital (Europe) 
  Limited (Joint Broker)             [phone] 
  Raj Khatri / Nick Stamp                       2000 
 Tavistock (Financial PR) 
  Simon Hudson / Barney Hayward      [phone] 
  / James Collins                               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 30(th) September 2016 had 750 MW of assets with a further 186 MW under development or in pipeline. In the six months ended 30(th) September 2016, according to its unaudited results for the period, the Company generated revenues of GBP118 million, EBITDA of GBP41 million, profit before tax of GBP18 million.

-ends-

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCDGGDSLSGBGRS

(END) Dow Jones Newswires

April 05, 2017 02:00 ET (06:00 GMT)