Grapevine: PEs eye Luminous; Tata Steel hits hurdle in Dutch unit sale

By Narinder Kapur

  • 25 Jan 2021

At least three global private equity firms are in a race to acquire power equipment firm Luminous Power Technologies from France-based Schneider Electric, The Economic Times reported on Monday.

Apollo Global Management, Bain Capital and Blackstone have been shortlisted for the deal following initial bids, vaulting over Tata group’s Voltas and Hyderabad-based Amara Raja Batteries, the report said, citing people aware of the developments.

Due diligence processes have begun, with final and binding offers expected to be submitted in the next five-six weeks, the people said. As per the report, Luminous Power could be sold for Rs 3,500-4,000 crore (about $479-548 million). Schneider has mandated Citi to find a buyer for its subsidiary.

The development comes after reports in November last year suggested that Schneider was looking to sell Luminous at a valuation of up to $600 million (about Rs 4,376 crore).

According to VCCEdge, the company reported consolidated net sales of Rs 3,231.19 crore (about $442 million) for the 2019-20 financial year, with net profits of Rs 141.2 crore (about $19 million) for the same period.

Schneider Electric initially acquired Luminous Power in 2011 through a 74% stake purchase for around Rs 1,400 crore (about $191 million). It later acquired the remaining shareholding in the company for an undisclosed amount.

Meanwhile, Tata Steel Ltd’s attempt to sell its operations in the Netherlands to a Swedish steel manufacturer has run into trouble following reservations expressed by large shareholders of the latter.

SSAB AB has told Tata Steel that it might not be able to close the deal within the six-month internal deadline that the two companies had agreed on in November, Mint reported, citing two people aware of the talks.

The development comes after two of SSAB’s largest shareholders — mining firm LKAB and asset management firm Industrivarden — expressed reservations on matters including the increased carbon footprint for the Swedish giant following the deal, and possible issues with securing regulatory clearances.

Collectively, the two own a nearly 21% stake in the steelmaker, the report said, citing Swedish financial daily Dagens Industri. However, the deal is not yet off the table. While Tata Steel confirmed that it is in discussions with SSAB, a spokesperson for the latter declined to comment.

In another development, state-run NTPC Ltd and SJVN Ltd have submitted bids to acquire PTC India Ltd’s wind power assets spread across states such as Madhya Pradesh, Karnataka and Andhra Pradesh, Mint reported.

The sale of the assets — with a capacity of around 289 megawatts — is part of PTC India’s larger plan to exit its wind power business, the report said, citing people aware of the power trading company’s strategy.

The assets in question have a potential enterprise value of Rs 2,000 crore (about $274.2 million), and are owned by PTC India’s subsidiary PTC Energy Ltd.

Initially, KPMG was hired to manage the sale, with private entities such as Macquarie Infrastructure, CLP India and Hero Future Energies said to be in the fray.

However, PTC has now decided to sell the assets to a government-owned enterprise, with SBI Capital Markets acting as the adviser to the sale. A PTC India spokesperson declined to comment on the development, the report said.

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