Crompton Greaves to sell overseas power unit to First Reserve for $126M

Electrical equipment maker Crompton Greaves Ltd said on Wednesday it has agreed to sell its international power business to US private equity firm First Reserve International Ltd for an enterprise value of 115 million euros ($126 million, or about Rs 850 crore).

The company has accepted a revised binding letter of offer by First Reserve for the acquisition of its European, North American and Indonesian power businesses, it said in a stock-exchange filing.

“The sale will enable the company to reduce debt and focus on its faster growing Indian businesses,” it said in the filing. The company is also looking to monetise its other overseas B2B businesses, it added.

The offer is subject to regulatory and shareholder approvals and signing of a definitive agreement.

The development comes a month after the company said it had rejected an offer for the overseas power unit due to disagreement over some terms and that discussions were on with the potential buyer to seal the deal.

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 October, 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, 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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