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GVK wants to sell Punjab unit to NTPC

Steel News - Published on Wed, 02 Apr 2014

Business Standard reported that GVK Power & Infrastructure is looking to monetise its 540 MW Goindwal Sahib power plant in Punjab. The company is known to have approached state-owned power generator NTPC for a possible sale.

According to a Prabhudas Liladher report, the plant has coal linkages with the Tokisud and Seregarha mines from Jharkhand. It is still under construction and is expected to commission in the first quarter of the coming financial year. It also has a 25 year power purchase agreement with Punjab State Power Commission. The cost of setting up the project is around INR 2,000 crore.

A source said that “The talks are yet to begin on the deal but the paperwork has begun.” GVK said that it would not comment on speculation when asked; NTPC did not respond to a query. But GVK is known to be interested in completely exiting the project.

In an interview earlier, the chairman of NTPC had said they’d been getting offers for purchase from various private power entities to sell their assets. Mr Arup Roy Choudhury, CMD of NTPC said that “However, we will only look at power assets if land, fuel, water and environmental clearances are available. Some producers have gone in for power assets without ticking off these boxes and we will not do that.”

NTPC, the country’s biggest power generator, with cash reserves of INR 16,867 crore, had last month issued an expression of interest to buy coal-based power plants, whether operational, commissioned, synchronised, under construction or under planning. State electricity boards, independent power producers, power plant developers and captive power producers were asked to offer projects based on domestic coal, imported coal or a mix. EoIs have to be given by April 7th.

GVK’s power business has been posting lower revenues on account of reduced supplies to its three operating gas fired power plants, totalling 900 MW in capacity. In the quarter ended December, it posted revenue of INR 97.6 crore, down from INR 237 crore in the same quarter last year.

After a hiatus of around 2 years, a few power companies have been able to strike a few deals to monetise their assets. Recently, Singapore based Sembcorp bought a 45% stake in Nagarjuna Construction’s Company’s 1,320 MW project in Andhra, INR 848 crore. In December last year, French power utility GDF Suez bought 74% in Meenakshi Energy for USD 400 million. The company has 300 MW of operational capacity and is building a 700 MW coal fired plant in Andhra.

Source - Business Standard


Posted By : admin on Wed, 02 Apr 2014
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