Gayatri Projects to reduce stake in NCC Power Projects...

 

Gayatri Projects (GPL), an infrastructure company, proposed dilution of company's stake in NCC Power Projects to below 45%.

Gayatri's wholly owned subsidiary Gayatri Energy Ventures is a major partner in NCC Power Projects, which is building a 1,320 MW Coal fired plant in Nellore district in Andhra Pradesh.

At present preliminary discussions are taking place between NCC Infra and Sembcorp for the investment in NCC power projects, which is subject to a detailed technical, financial, commercial & legal due diligence.

The terms of investment including structuring will be finalized after the due diligence process and negotiations are completely between the parties. As a result of the proposed investment the stake of the Gayatri Energy ventures (WOS of Gayatri Projects) (Q,N,C,F)* may be reduced below 45%.

Shares of the company gained Rs 2.3, or 4.04%, to trade at Rs 59.20. The total volume of shares traded was 44,696 at the BSE (12.10 p.m., Monday).

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NCC close to selling its thermal power assets to Sembcorp...

 

Infrastructure firm NCC has signed a detailed term sheet to sell its thermal power assets to Singapore global utilities services firm Sembcorp, moving a step closer to a definitive agreement, said two people aware of the development.

The development comes days after France's power GDF Suez agreed to buy a 74% stake in Meenakshi Energy, possibly indicating revival of interest among global investors in Indian infrastructure.

The sources said NCC and Sembcorp agreed on a broad framework to determine premiums to be paid on attainment of milestones.

They expect a definitive agreement and a final deal over the next six to eight weeks. NCC is developing a 1,320MW coal-fired power project at Krishnapatnam in Nellore district of Andhra Pradesh in a joint venture with Gayatri Projects, another Hyderabad-based infrastructure firm. NCC holds 55% stake in the project.

Sembcorp proposes to pay around 500 crore to buy the stake from NCC and invest more in phases. The premium payments will be made over the next few years based on milestones like project completion, fuel linkages and power purchase agreements. NCC will continue as the EPC (engineering, procurement and construction) contractor.

Confirming a detailed term sheet with Sembcorp, KV Rao, CEO of NCC Infrastructure Holdings, the holding company of NCC for BOT road and power assets, told ET that he expects a definitive agreement with Sembcorp by January next year. Sembcorp did not respond to an E&Y mail seeking details on the agreement with NCC.

PwC's energy, utilities and mining leader Kameswara Rao said the structuring of the deals is "understandable and bridges the gap between long-term expectations and the more immediate concerns of project delivery risks".

If it fructifies, the deal will make it the third major investment in India for Sembcorp, which had reported revenues of S$10.2 billion ( 48,000 crore) in fiscal 2012, and its second in India's power sector. Sembcorp bought a 49% stake in a 1,320MW power project being developed by Thermal Powertech of Gayatri Projects for 1,042 crore in 2010. Earlier in November 2009, it had bought 40% stake in a marine offshore venture of Kakinada Seaports.

The deal also helps Sembcorp increase its Indian power portfolio to 2,640MW, at Krishnapatnam in Andhra Pradesh, making it the third largest global investor in the Indian energy sector after Hong Kong's CLP Holdings and United States-based AES Corporation.

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