GMR Energy divests 30% stake to Malaysia firm at $300 million

Bengaluru: GMR Infrastructure said on Monday that it has approved the proposed primary capital investment by Malaysian power utility Tenaga Nasional Berhad (Tenaga) in GMR Energy Ltd (GEL).​

GMR Group said in a statement here that subsidiary GMR Energy will divest 30 percent of its assets to Tenaga.

"The investment represents 30 percent equity stake in a select portfolio of GEL assets on fully diluted basis, for cash consideration of $300 million," GMR said.

Tenaga is Malaysia`s largest power utility player with a total installed capacity of 10,818 MW, the statement said.

"Through this partnership, GMR Group is bringing a world class power developer and operator in the Indian market. Tenaga`s experience would further facilitate GEL in improving the performance of its operational assets and develop its underdeveloped pipeline of hydro and renewable energy assets," it added.

GMR Infrastructure said the funds invested would primarily be utilised for repayment of its corporate debt.

"This would lead to a reduction in GIL consolidated corporate debt and will result in a stronger balance sheet," it said.

According to the group, GEL will manage a balanced portfolio of coal-based, gas-based and renewable power projects having a total capacity of 4,630 MW.

"Further, Tenaga has the right to invest in Chhattisgarh and other assets at any time within the next five years," GMR said.

GMR group Chairman G M Rao said: "India's substantial and sustained economic growth will require collaboration from all stakeholders in the power sector. The Prime Minister has set a vision of 24x7 power for all by 2022... We believe our partnership with a major power sector player like Tenaga is one of the steps to implement the Prime Minister's vision."

According to GMR Energy Chairman G B S Raju, the collaboration "once again signifies GMR's commitment and ability to successfully execute strategic partnerships to create value for all its stakeholders".

Moelis & Company acted as the financial advisor to GEL. White & Case, Cyril Amarchand Mangaldas and Krishnamurthy & Co acted as legal counsel for GEL.

For Tenaga Nasional Berhad, Credit Suisse AG acted as the transaction advisor while Slaughter & May and Khaitan & Co served as the legal counsel and KPMG the regulatory and financial advisor