GMR to sell 30% stake in energy unit to Malaysia’s Tenaga for $300 mn

GMR Infrastructure Ltd will sell a 30% stake in unit GMR Energy Ltd to Malaysian utility Tenaga Nasional Berhad for $300 million (about Rs 2,000 crore).

The funds will mainly be used to repay debt, GMR Infrastructure said in a stock-exchange filing.

While the Indian company said it is selling a stake in a select portfolio of assets held by GMR Energy, Tenaga said in a separate statement it has signed a pact to pick up a 30% stake in the energy company that counts Indian lender IDFC Bank and Singapore state investment firm Temasek as investors. The transaction is likely to be completed by December this year, it said.

GMR is among several Indian infrastructure companies that have been selling assets to cut debt. Jaypee Group has agreed to sell most of its cement assets to UltraTech Cement Ltd for Rs 15,900 crore while Jindal Steel and Power Ltd earlier this month agreed to sell power plant to JSW Energy Ltd for up to Rs 6,500 crore to reduce debt.

As of December 31, 2015, GMR had a net debt of Rs 40,247 crore. In the recent past, GMR Infrastructure agreed to divest 51% stake in a 99-km highway project GMR OSE Hungund Hospet Highways Pvt Ltd to its joint venture partner Oriental Structural Engineers Pvt Ltd.

GMR Energy chairman GBS Raju said in a statement the latest deal will provide a renewed impetus to the company’s energy business and result in a stronger balance sheet, enabling the company to capitalise on future growth opportunities.

GMR Energy has thermal, hydro and solar power projects with an operating capacity of 2,300 MW. It has projects with capacity of 2,330 MW under development. GMR also said that Tenaga has the right to invest in its Chhattisgarh project and other assets at any time within the next five years.

Tenaga is the largest power utility in Malaysia with a total installed capacity of 10,818 MW and 50 per cent market share of the Malaysian grid’s generation capacity. It also manages and operates power assets in Southeast Asia, South Asia and Turkey.

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