CLP India Pvt. Ltd has agreed to buy three power transmission assets from Kalpataru Power Transmission Ltd for a total enterprise value of Rs 3,275 crore ($476 million).
The deal marks the entry of CLP India, a power generation company backed by Canadian pension fund CDPQ, in the transmission segment and helps Kalpataru cut its debt, the companies said.
Kalpataru said in a statement on Wednesday it has agreed to sell its stake in Kalpataru Satpura Transco Pvt. Ltd (KSTPL), Alipurduar Transmission Ltd (ATL) and Kohima Mariani Transmission Ltd (KMTL).
“Entering the transmission sector is a landmark for CLP India. The acquisition… will enable us to expand our geographical reach across the country and reinforces our commitment to grow our investments,” said Rajiv Mishra, managing director at CLP India.
Mishra also said that India is a primary growth market for CLP and CDPQ, and that the two companies aim to invest only in a “low-carbon, clean energy portfolio” in the country.
CDPQ, short for Caisse de dépôt et placement du Québec, had acquired a 40% stake in CLP India last year for Rs 2,640 crore. Hong Kong’s CLP Group retains a 60% stake in the Indian unit.
CLP entered India in 2002 and has gradually grown its presence in the power sector. It has 16 wind energy projects, three solar energy projects, a coal‐fired power plant in Haryana and a gas-based combined cycle power plant in Gujarat with a total generation capacity of 3,000 MW.
Kalpataru said the estimated amount of debt on the books of the three assets would be about Rs 2,000 crore. The company fully owns KSTPL and ATL. It holds a 74% stake in KMTL while the balance 26% is owned by Techno Electric & Engineering Company Ltd.
“The sale of assets will lead to a significant reduction in Kalpataru Power’s consolidated debt and will help focus on strategic diversification within core business,” said CEO Manish Mohnot.
The deal is subject to requisite approvals and compliances. The transaction for ATL and KMTL will be effective after they start commercial operations.
EY and Khaitan & Co. are advisers to Kalpataru and Techno Electric for this transaction.