Rs 1.2 bln IPO to be raised by LVL to develop power sector
Sri Lanka’s hydro power sector is saturated as there are no sites to be developed for hydro power to be tapped, and for this reason Lanka Ventures PLC (LVL) plans to go outside Sri Lanka to build new hydro power projects.
LVL CEO Sumith Arangala, speaking at a media briefing in Colombo this week in connection with raising a Rs. 1.2 billion IPO by LVL Energy Fund Ltd, said: “We are interested in doing thermal projects as there is tremendous opportunities in Bangladesh due to an acute power shortage there.”
He said there is still potential for wind and solar power development in Sri Lanka as the government is opening up opportunities for the private sector to participate. “There are opportunities in East Africa as well although we have still not come across any such project.”
He said the company has a proven track record and has delivered dividends to its shareholders since 2010. The LVL Energy Fund has also delivered 47 per cent year-on year growth in earnings over the last five years. Prior to this IPO on the Colombo Stock Exchange, the company successfully raised Rs. 951 million in the form of private placements.
Managing Director of Acuity Partners (Pvt) Ltd, Ray Abeywardena said the IPO for Rs. 1.2 billion which opens on December 14 is the largest public issue in Sri Lanka since 2015.
Senior Vice President of Acutity Partners, Shehan Cooray said that Rs. 120 million worth of Rs. 10 ordinary shares will be issued and already Rs. 700 million of the IPO has been underwritten by the Sampath Bank and the DFCC Bank. The money raised from the IPO will be utilised for power projects the company intend to begin in the near future.
“Of the Rs. 1.2 billion raised, Rs.720 million will be invested in three new hydro power projects viz two hydro power projects in Sri Lanka with 3.9 MW capacity with an investment of Rs. 255 million and the balance Rs. 465 million in a 10 MW capacity hydro plant in Nepal. The remaining part of the IPO proceeds amounting to Rs. 480 million will be utilised for settlement of debt to improve company’s borrowing capacity to finance more projects in the pipeline.”
He said the other two projects in the pipeline include 10 MW wind power projects in the Jaffna Peninsula and one 100 MW thermal power project in Bangladesh.
LVL is a pioneering venture capital company in Sri Lanka launched since the 1990s which has 10 operational plants in Sri Lanka and Bangladesh.