GMR Energy completes 30% stake sale to Malaysian power utility Tenaga

07 November 2016

Bangalore-based GMR group has completed the transaction of allotting 30% stake in GMR Energy Limited (GEL) to Malaysia-based Tenaga Nasional Berhad. The company in a statement said GMR Energy, a subsidiary of GMR Infrastructure, has alloted 30% stake to Tenaga Nasional Berhad, Malaysia (TNB) for a cash consideration of $300 million, implying an equity value of $1 billion or around Rs 6,665 crore.

GEL and TNB had announced this strategic partnership in May 2016 and the allotment of shares “marks the completion of this landmark transaction in the power sector”, it said.

The Malaysian power giant would have the right to invest in other assets including Chhattisgarh Power Plant, Indonesian power assets and others at any time within the next five years. The group was awarded Ganeshpur coal block for 1370 mw Chhatisgarh power plant in e-auction last year.

Tenaga will also appoint their executives in the senior management of GMR Energy during the development and operation stage of the projects in which it has picked up the stake.

The portfolio comprises operating capacity of 2,300 MW and pipeline capacity of 2,330 MW. The entire sale proceeds would be used for retiring Rs 2,000 crore debt of GMR Energy.

In December last year, GMR Infrastructure raised another Rs 2,000 crore ($300 million) from Kuwait Investment Authority (KIA) which was the largest bilateral investment between India and the West Asian country in recent times. The Kuwaiti authority subscribed to GMR’s 60-year long Foreign Currency Convertible Bond (FCCB) due 2075.

The debt-burdened group has been following an asset light strategy and has been on a capex holiday, except for select opportunities in the airport sector, for the last few years. In the last few years, it divested five assets releasing Rs 3,800 crore equity and reducing liabilities by Rs 6,200 crore.

Source – BS