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Crompton Greaves scraps deal to sell overseas power biz to First Reserve

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Electrical equipment maker Crompton Greaves Ltd said on Wednesday it has terminated a pact to sell its international power business to US private equity firm First Reserve International Ltd.

The proposed deal with Pauwels Spaco Ltd, a special purpose vehicle of First Reserve, was scrapped after the two sides could not fulfill certain necessary conditions, Crompton Greaves said in a stock-exchange filing.

Crompton Greaves had in March signed the pact for the sale of its European, North American and Indonesian power businesses at an enterprise value of 115 million euros ($126 million, or about Rs 850 crore then).

This pact was signed when First Reserve submitted a revised offer a month after Crompton Greaves rejected an offer for the overseas power unit due to disagreement over some terms.

The proposed sale was part of the company’s efforts to reduce debt and focus on its faster-growing Indian businesses, it said at the time.

The Gautam Thapar-led Avantha Group, which is the promoter of Crompton Greaves, has been consolidating its business over the past two years to cut debt and focus on its core businesses.

Last month, Crompton Greaves said it would sell its enterprise automation business to Saudi Arabia’s Alfanar for 120 million euros ($133 million, or about Rs 886 crore) including debt. The company said on Wednesday the deal is progressing toward completion.

In October last year, Crompton Greaves sold its power transformer business in Canada to PTI Holdings Corp for about C$20 million ($15.18 million, or Rs 99 crore then). Avantha has also sold an asset under the power generation arm to Adani Power and sold its Malaysian paper unit under Ballarpur Industries Ltd.

Last year, Crompton Greaves decided to hive off its consumer appliance business into a separate listed firm. In a parallel deal, Avantha said it will sell its entire stake in that demerged business to PE firm Advent and Singapore government's investment arm Temasek.

In November last year, the company received the Bombay High Court’s approval to de-merge its consumer products business into a separate listed firm.

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Avantha Group is an industrial conglomerate. It is engaged in the diverse business of pulp and paper business, food processing, chemicals, power transmission and distribution of equipment and services, energy and infrastructure, green building material and information technology and information technology-enabled services. The company is based in Gurgaon, Haryana.

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