The Rs. 350 million Initial Public Offering (IPO) of Hydro Power Free Lanka Ltd. had triggered a massive oversubscription with investors demanding a staggering Rs. 20 billion worth of shares.
The registrars to the issue said yesterday that the IPO had generated 111 applications with payments made by bank guarantees requesting 1.925 billion shares worth Rs. 19.25 billion whilst 6,778 applications had requested for 71.88 million shares worth Rs. 718.8 million, bringing the total to Rs. 20 billion reflecting an oversubscription of 57 times.
The IPO was for 35 million ordinary shares at Rs. 10 each with Hydro Power Free Lanka seeking a main board listing. Funds raised via the IPO are to be utilised for the construction of four more mini hydro plants (MHPs) under their three fully owned subsidiaries.
HPFL is jointly owned, in equal proportions, by Pussellawa Plantations Ltd (PPL) and Free Lanka Power Holdings (Pvt) Ltd (FLPH). The initial stage of hydro power generation began with the construction of the Sanquhar MHP in 2002 with a capacity of 1.6 MW, where power generation commenced from December 2003. The plant, located on the Sanquhar Tea Estate in Atabage village, uses the water flow from the lower section of Galatha Oya, which can be accessed through Gampola-Nuwara Eliya Road.
The second hydro plant, namely the Delta MHP, was constructed in 2004 where power generation commenced in April 2006. This plant too has a power generation capacity of 1.6 MW and is located on the Delta Tea Estate in the village of Pupuressa. The plant uses the water flow from the upper section of the Atabage river, which too can be accessed through the Gampola-Nuwara Eliya Road.
Both these projects are located on tea estates managed by Pussellawa Plantations Ltd. in Gampola in the Kandy District and they harness the run-of-river hydro power technology. The projects were funded by the two parent entities PPL and FLPH and project loans obtained from Hatton National Bank Ltd. There were no overdraft funds used for funding of the projects.