Gujarat-based Sintex Industries Ltd is in talks with AIM-listed OPG Power Ventures to acquire its upcoming power projects in the state. Sources directly familiar with the development said, Sintex - with plastics and textiles as its core business - was engaged in serious discussions to acquire OPG Power Gujarat Private Ltd, which is developing 300MW coal-based power plants in Kutch.

The equity value of this project is expected at Rs 400 crore. OPG Power Ventures may look at inorganic opportunities to acquire an existing project in India with the funds realised from this sale. The firm's overall liquidity may stand at Rs 600 crore after factoring in the cash unlocked if the deal goes through.

"We do not have any comments to offer," said Sunil Kanojia, Group President of Sintex Industries. "There are no ongoing talks," Arvind Gupta, MD, OPG Power Ventures, said when contacted on phone. Email to Mr Gupta remained unanswered at the time of publishing this report.

VCCircle could not ascertain whether talks centered around Sintex Industries acquiring the assets, or promoters looking at the deal through their investment entities.

The development comes as the power plant has seen delays in construction and commissioning due to various environmental issues. The power plant has recently got environmental clearances and commenced development, with commission of the plant expected in the first half of 2013.

OPG Power Ventures had said at the time of its IPO that the project was expected to go on stream in the first quarter of 2010. The project has already awarded contract of engineering, procurement & construction (EPC) and supply of boiler, turbine & generator with BHEL. Tata Power Company is managing the project with coal linkages from the Government of India.

It also had a funding commitment of $212.5 million by a syndicate of banks led by Punjab National Bank.

OPG Power Ventures currently has an operational capacity of 107MW, which includes an 77 MW plant in Tamil Nadu. The company, which raised £65.05 million ($100 million) in May 2008 from its IPO, reported revenues of £12.87 million ($20.38 million) for FY10.

Sintex had revenues of Rs 3,281 crore and a profit after tax of Rs 325 crore with a debt-to-equity ratio of 1.14 for FY10. Besides plastic, Sintex is present in building materials, custom molding among others.

Sintex counter has gained 8% in the last three days, with the stock closing 4.23% higher at Rs 384 on BSE.

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