KARACHI, March 12: Sui Southern Gas Company Limited (SSGC) will launch Term Finance Certificates (TFCs) worth Rs1 billion in May this year to finance its gas infrastructure, rehabilitation and expansion projects.

A senior executive of the SSGC told Dawn that the issue of TFCs is expected to be launched in the first week of May. This would be the second issue of the TFCs of same worth, which launched in May 2001 by the company.

The SSGC, the executive said, has appointed a consortium, led by Jahangir Siddiqui and Company as its financial adviser to finalize the structure of the TFCs and the interest rate issue.

He said the financial adviser is conducting a market survey in order to give a best deal in terms of fixing interest rate, aimed at generating good response from the investors who usually compare it with the returns on national saving schemes (NSS).

The SSGC, he added, will also opt for the “green shoe option” to the extent of 25 per cent in case the TFCs are over-subscribed. The amount for the option is Rs250 million.

The company will raise funds through the TFCs to meet the cost of its six on-going projects with an estimated cost of Rs4,380 million. The name of the projects are: Zamzama gas field integration, Bhit Bajra Pipeline, augmentation of ACPL gas transmission and distribution pipeline, capacity augmentation of the FJFC spur loopline, Sawan gas field integration, compressors relocation to Hyderabad, rehabilitation of the Indus Left Bank Pipeline and Scada System.

The integration of Zamzama gas field at Dadu has been achieved and other project components are in various stages of implementation.

According to Research Head of InvestCap and Securities, Mohammad Sohail, the year 2001 was a booming year for TFCs following issuance of 17 new issue that were brought for initial public offering (IPO) in the local stock markets worth Rs12.3 billion.

A total 34 issues entered the listed TFC market since 1995, generating more than Rs19 billion till now, he said. Out of 17 TFCs, six were from the leasing companies. PARCO’s issue of Rs2.5 billion was the largest issue of the year.