Ksk Power Regulatory News (KSK)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA OR CANADA OR JAPAN OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL.

Thursday 6 February 2014

KSK Power Ventur plc

("KSK", the "Group" or the "Company")

Placing of new shares raising £20.7 million

KSK Power Ventur plc (KSK.L), the power project company listed on the London Stock Exchange with interests in multiple power plants and businesses across India, is pleased to announce that it has successfully raised approximately £20.7 million (before expenses) through the placing ("Placing") of 15,930,000 Ordinary Shares (the "Placing Shares") at a price of 130 pence per Placing Share (the "Placing Price") with new and existing institutional shareholders through its broker Arden Partners plc ("Arden").

The Placing Price represents a discount of 11.86 per cent. to the closing mid-market price of the Ordinary Shares as derived from the Daily Official List of the London Stock Exchange on Wednesday 5 February 2014, the latest practicable date prior to the date of this announcement.

Of the £20.7 million, up to £8.3 million (the "First Placing") has been placed conditionally using existing shareholder permissions. The balance of £12.4 million (the "Second Placing") has been conditionally placed, subject to the passing of the necessary resolutions by shareholders at an extraordinary general meeting of the Company ("EGM").

Placing Details

The First Placing is conditional upon, amongst other things, admission to the standard listing on the Official List, and to trading on the Main Market of the London Stock Exchange ("Admission"). Application has been made in respect of Admission of the First Placing Shares and trading is expected to commence at 8.00 a.m. on Tuesday 11 February 2014.

Following Admission of the First Placing Shares, the total number of Ordinary Shares with voting rights in the Company will be 175,308,600. This figure may be used by shareholders following Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company, under the Financial Conduct Authority's Disclosure and Transparency Rules.

The Second Placing is conditional upon, amongst other things, the passing of the necessary resolution by the Company's shareholders at the EGM, and Admission of the Second Placing Shares. Once the necessary resolution is passed, Admission in respect of the Second Placing Shares is expected to occur on Tuesday 25 February 2014. A circular convening the EGM of the Company to pass the necessary shareholder resolution is expected to be sent to shareholders as soon as possible.

Background to and reasons for the Placing

The demand for power in India continues to grow and there is a clear requirement for new generation capacity.

The Group's power generation assets are held through the Company's 74.94 per cent. subsidiary, KSK Energy Ventures Limited ("KSKEV") which is listed on the Bombay Stock Exchange and the National Stock Exchange of India.

The Group's strategy is to leverage and vertically integrate upstream its operations into the power generation supply chain. It is consolidating the support infrastructure and supply chains to its power production operations by making investments in its mineral, water resources and transport infrastructure for the movement of coal supplies over rail lines. These investments are held in its subsidiary, KSK Energy Company Private Limited.

Use of proceeds

Accordingly, the Company is now looking to raise £20.7 million (approximately US$33.8 million) by way of an issue of 15,930,000 new Ordinary Shares in the Company to invest in its rail, water and mineral resources infrastructure activities related to the KSK Mahanadi (Chattisgarh) 3,600 MW site, as well as its ongoing working capital requirements.

Related Party Considerations

Sayi Energy Ventur Limited ("Sayi"), which is currently interested in approximately 60.72 per cent. of the existing Ordinary Share capital (and in which two of the Directors, S. Kishore and K.A. Sastry, are deemed to be interested), is participating in the Placing and has agreed to subscribe for all the Second Placing Shares representing 60.0 per cent. of the total Placing Shares. Although the related party provisions of the Listing Rules do not apply to the Company in light of its standard listing, the Company agreed at the time of its move from AIM to the Main Market to conduct its activities as if the relevant AIM requirements continued to apply. Accordingly in light of Sayi's participation in the Placing, the Company's independent Directors consider, having consulted with Arden, the Company's broker, that the terms of Sayi's participation in the Placing are fair and reasonable insofar as shareholders are concerned.

Upon completion of the Placing, it is anticipated that Sayi will be interested (and accordingly S. Kishore and K.A. Sastry will be deemed interested) in an aggregate of 106,336,750 Ordinary Shares representing 60.66 per cent. of the enlarged share capital of the Company (comprising the existing Ordinary Shares and the Placing Shares). In addition, Sayi has also given the Company an irrevocable undertaking to vote all of the Ordinary Shares held by it in favour of the resolutions at the Company's upcoming EGM in relation to the Placing.

Outlook

As has been recently reported, the Group has seen the pricing of long term power purchase agreements improving, with significantly higher tariff rates being achieved. In addition, it was announced on 17 January 2014 that the Ministry of Coal had directed Coal India Limited to execute the Fuel Supply Agreement to provide coal for 1,800 MW to KSK Mahanadi.

The Group considers that consolidating the various supply chain activities within KSKEV will also help ensure that planned generation capacity is synchronised with the availability of fuel supplies through vertically integrated power generation operations.

Project costs have been increasing, with the depreciation of the Indian Rupee and the resulting impact on imports of capital goods and costs across all power projects in India. Lower financing costs are being pursued by the Company under various refinancing initiatives.

Earlier today, the Company announced that Mr Keith Nicholas Henry and Mr Guy Delemere Lafferty have agreed to join the Company's board as new Non-Executive Directors, subject to usual regulatory searches.

Against this background, the Company is looking forward to emerging as one of the more stable players in the Indian power generation landscape.

Conclusion

Commenting on the Placing, Mr T L Sankar, Chairman, said:

"We are delighted at this support from our shareholders. There have been various developments in the Indian power sector which gives encouragement for producers but there is still further progress to be made"

For further information, please contact:

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to subscribe for or a solicitation of an offer to buy or subscribe for any securities in any jurisdiction including in which such an offer or solicitation is unlawful and is not for distribution in or into, without limitation, the United Kingdom, the United States, Canada, Australia or Japan (the "Excluded Territories"), or to US persons (within the meaning of Regulations of the United States Securities Act 1933 (as amended) (the "Securities Act").

The Placing Shares have not been and will not be registered under the Securities Act or under the applicable securities laws of any state in the United States or any Excluded Territory and, unless an exemption under such act or laws is available may not be offered for sale or subscription or sold or subscribed directly or indirectly within the Excluded Territories or for the account or benefit of any national, resident or citizen of the Excluded Territories. No public offering of securities will be made in the United States. The distribution of this announcement in other jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.

Arden, which is authorised and regulated by the Financial Conduct Authority, is acting exclusively for KSK and for no one else in connection with the book building and the Placing and will not be responsible to anyone other than KSK for providing the protections afforded to clients of Arden nor for providing advice in relation to the Placing or the book building or any other matters referred to in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on Arden by the Financial Services and Markets Act 2000 (as amended) or the regulatory regime established thereunder, Arden does not accept any responsibility for the contents, accuracy, completeness and/or verification of this announcement or any other statements made or purported to be made by it, or on its behalf, in connection with the Company, the Placing, the Placing Shares or any other matter referred to in this announcement. Arden disclaims any and all liability (save as referred to above) to Shareholders and any other person in respect of this announcement or such statement.

The contents of this announcement are not to be construed as legal, financial or tax advice. If necessary, each recipient of this announcement should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

This announcement contains certain statements that are or may be "forward-looking statements". These statements typically contain words such as "intends", "expects", "anticipates", "estimates" and words of similar import. All the statements other than statements of historical facts included in this announcement, including, without limitation, those regarding KSK's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to KSK's products and services) are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and therefore undue reliance should not be placed on such forward-looking statements. There are a number of factors that could cause the actual results, performance or achievements of KSK or those markets and economies to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding KSK's present and future business strategies and the environment in which KSK will operate in the future and such assumptions may or may not prove to be correct. Forward-looking statements speak only as at the date they are made. Neither KSK nor Arden nor any other person undertakes any obligation (other than, in the case of KSK, pursuant to the Listing Rules and the Disclosure and Transparency Rules) to update publicly any of the information contained in this announcement, including any forward-looking statements, in the light of new information, change in circumstances or future events.