Saturday, 2 September 2017

LVL Energy Fund plans to 1.2 bn.IPO within next three months

Hydro, wind and thermal presence in SL and Bangladesh with project due in Nepal

LVL Energy Fund Ltd. (LVLEF), a power generating joint venture controlled by HNB and DFCC Banks with a presence in Sri Lanka and Bangladesh and entry into Nepal later this year, has increased earnings in the year ended March 31, 2017 and expects to have an initial public offering (IPO) on the Colombo Stock Exchange within the next three months.

The fund’s investment include hydro, wind power and thermal projects and it will take 40% of a 114 MW heavy fuel oil power plant in Bangladesh to be executed by a project partners expected to be ready by the end of this year. The generating tilt is towards renewables.

Despite the impact of dry weather during the year under review, the fund posted an after tax profit of Rs. 465 million during the year, up from Rs. 357 million an year earlier. The profit share from associate companies mainly made good the lag in other areas of operation – largely interest costs.

LVLEF with a stated capital and reserves of Rs. 2.26 billion, up from Rs. 1.88 billion the previous year, had total assets of nearly Rs. 4 billion in its books at the end of the year under review.

"Whilst the wind power plants recorded power generation comparable to previous years, the performance of hydro power plants was less than satisfactory due to poor rainfall in the catchment areas," LVELF Chairman Jonathan Alles said.

Two thermal plants in Bangladesh where they have stakes had contributed Rs. 224 million to the group profit, up from Rs. 94 million the previous year, he said.

Their Campion hydropower plant, lying across Kehelgamuwa Oya in Bogawantalawa, had been connected to the national grid last April. This project is executed by a subsidiary of LVLEF.

Alles said that they planned to issue 120 million ordinary shares at an issue price of ten rupees per share to raise Rs. 1.2 billion in the forthcoming IPO. Of these funds, Rs. 480 million will be used to settle debt and the balance Rs. 720 million invested in projects.

He said that after commissioning their Bambarapana hydropower plant being built across the Uma Oya in Badulla in October this year, the total installed hydropower capacity in their portfolio will increase to 19.4 MW from 15.7 MW as at Mar. 31, 2017.

The directors of the company are Messrs. Jonathan Alles, Sunil de Silva, Tyronne de Silva, Mohandas Wijetunge, Ray aBeywardene, Ananda Munasinghe, Sumith Arangala and Lakshman Silva.
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