Blackstone-backed NCC to sell more stake in power project to Sembcorp

NCC Ltd has signed a pact to sell some more stake in Sembcorp Gayatri Power Ltd (SGPL) to Singapore's Sembcorp Utilities Pte Ltd for Rs 301.26 crore (about $45.4 million) in the second tranche of a transaction agreed last month.

The total amount involved in the deal also includes interest, NCC said in a stock-exchange filing. NCC will receive a net amount of Rs 77.04 crore after adjusting a "mobilisation advance" received from SGPL for executing the project, it said.

In March, the Indian infrastructure firm had said it agreed to sell a stake in SGPL to Sembcorp Utilities for Rs 352 crore ($52 million).

Sembcorp had said at the time that its stake in SGPL would increase to 88% from 49% after the completion of the two-stage deal worth about Rs 650 crore and the conversion of debentures to shares. The remaining 12% will be held by Gayatri Energy Ventures Pvt. Ltd through NCC unit NCC Infrastructure Holdings Ltd.

SGPL was formerly known as NCC Power Projects Ltd, in which Gayatri Energy Ventures and NCC Ltd together held a 51 per cent stake. The company is developing a 1,320-megawatt coal-fired plant, in Nellore district of Andhra Pradesh, which is likely to be completed this year.

In 2014, Sembcorp, through wholly owned arm Sembcorp Utilities, agreed to pick up a 45 per cent stake in the power project developer for Rs 848 crore ($135 million then).

Singapore Stock Exchange-listed Sembcorp is an energy, water and marine group. It has about 10,600 MW of power capacity installed and under development. The project at Krishnapatnam in Nellore, when completed, will double Sembcorp’s power generation capacity in the country.

NCC, earlier known as Nagarjuna Construction Company, has been selling assets to cut debt. The company, in which private equity giant Blackstone holds a 9.9 per cent stake, said in June last year that it was looking to sell its road and power assets to cut debt.

In January this year, NCC sold its 51 per cent stake in Western UP Tollway Ltd, which operates a highway project in Uttar Pradesh, to private equity firm I Squared Capital. The deal also involved Gayatri Projects Ltd and its subsidiary Gayatri Infra Ventures Ltd selling their stake to I Squared. The enterprise value of the deal was Rs 575 crore (about $85 million).

In February, NCC sold its 38 per cent stake in Bangalore Elevated Tollway Ltd to IDFC Alternatives, the PE arm of IDFC Ltd. Soma Enterprise Ltd also sold an equal stake in the deal with an enterprise value of about Rs 750 crore.

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