Singapore-based Trust Energy Resources Pte Ltd (TERPL), a subsidiary of Tata Power Company Ltd, has announced that it will sell its three ships to a German firm for $212.76 million (approximately Rs 1,614.43 crore at current exchange rates).
TERPL will sell the MV Trust Agility, MV Trust Integrity and MV Trust Amity to Oldendorff Carriers GmbH & Co. KG, a family-owned shipping company headquartered in Lübeck, Germany.
The move will help TERPL achieve its objective of having an asset-light approach to its shipping requirements. The proceeds from the sale will also go towards reducing Tata Power’s debt as part of its company-wide restructuring process.
“The sale of our shipping assets is in line with our long term plans to reduce debt and raise funds to invest in our future growth plans, including expanding our presence in the renewable energy business,” Praveer Sinha, MD and CEO at Tata Power, said.
The transaction is expected to be completed within the next three to four weeks, subject to regulatory approvals. Shares of Tata Power ended the trading week 1.58% up at Rs 41.75 apiece.
According to VCCEdge, the data research arm of Mosaic Digital, the company reported consolidated net sales of Rs 29,136.37 crores for the 2019-20 financial year, with its profit-after-tax figure for the same period at Rs 736.65 crore. Its debt-to-equity ratio has steadily gone down in the past five financial years, from 3.31 for 2016 to 2.28 for 2020.
In November last year, reports said that the power generation arm of the Tata Group was looking to sell a stake in its renewable energy portfolio to global investors. Tata Power was reportedly examining the option of bringing in investors through an infrastructure investment trust (InvIT).