Hydro Power Free Lanka announces Rs. 350 m IPO

Friday, 15 October 2010 00:44 - - {{hitsCtrl.values.hits}}

By Cassandra Mascarenhas

Hydro Power Free Lanka Ltd. (HPFL), jointly owned by Pussellawa Plantations Ltd. and Free Lanka Power Holdings (Pvt.) Ltd., announced its intention to raise Rs. 350 million from the public through an Initial Public Offering (IPO) of 32% of its stake.

Chairperson of HPFL Rohini Nanayakkara answering a query from the audience following the announcement of HPFL’s IPO. From left: Director Murali Prakash, Managing Director and CEO Godfrey Aloysius, Deputy Chairman Kattar Aloysius, Reimo Saldin and Director Kamantha Amarasekera – Pic by Daminda Harsha Perera

Listing on the main board of the CSE, the company is offering 35,000,000 ordinary shares of the company at the share offer price of Rs. 10 each. The IPO will be launched on 26 October and kept open until 16 November unless fully subscribed before that, while the minimum subscription has been set at 2,000 shares and thereon in multiples of 1,000 shares.

The company, involved in hydro power development activities, is owned in equal proportion by the two companies, which will continue to own equal stakes in HPFL even after the subscription.

“The proceeds generated by the offer will be utilised for the construction of four more mini hydro plants. The company presently operates two 1.6MW plants, totaling to 3.2MW and we plan on adding 5.37MW to the national power grid with the construction of the two new plants,” HPFL Director Kamantha Amarasekera said.

Chairperson Rohini Nanayakkara added that these projects would also be tied up with the resources found on their own estates.

Power generated by these power plants will be classified under non-conventional renewable energy sources, which currently make up 10% of the national power grid.

Established in 2000 and commencing commercial operations in 2003, HPFL caters to the globally growing awareness on global warming, greening industries, etc., and the focus is on non-conventional renewable energy sources such as large or medium scale hydro or thermal power projects. At present the company has guaranteed demand from the Ceylon Electricity Board for the entirety of power generated by the grid.

Rising opportunities for such projects are envisaged in the future and given the resource situation at the time, the company intends to capitalise on such emerging opportunities during the next few years, although not under this current project.

Operations on the new project are set to commence in February 2011, with the second being initiated shortly afterwards and will be ready for commercial operations within two years.