French utility major GDF Suez is acquiring a 74% stake in the 1,000 MW coastal thermal plant owned by Meenakshi Energy for a total consideration of R650 Crore. Post the deal which values the plant at R900 Cr, the remaining 26% interest would rest with Meenakshi.
The investment is in line with the French group's strategy of investing in fast growing markets and gives the group an entry point into the Indian power sector.
The Meenakshi project comprises 300 MW of operational capacity and 700 MW under construction which is expected to be operational by 2015.
For the operational unit, the company has already signed a first of its kind agreement with power trading firm PTC, under which the PSU will supply coal to the unit in return for an equivalent value of electricity.
Meenakshi Energy is part of the Meenakshi Group which has its interest spanning across infra sectors like property development, power projects & road works.
The group's power sector projects include three hydro electric power projects with a cumulated capacity of 62 mw on the River Kolab in Orissa. The Rs 280 crore projects are funded by IREDA and PFC, while promoters brought in 30% as equity. The group is also implementing two biomass energy projects of 31 mw and 10 MW in Punjab.
GDF Suez - partly owned by the French government, is the world's largest independent power company that generates 116,000 mw of electricity with interests across the power sector value chain of generation and distribution, natural gas.
GDF SUEZ employs 138,200 people worldwide and has revenues of €82 billion in 2012.
The Group has a 10% share as strategic partner and shareholder in Petronet, the LNG importer and terminal operator.
GDF SUEZ is also currently developing with GAIL a floating LNG regasification terminal with a capacity of 3.5 million tons per year (MTPA), located in Kakinada, in the state of Andhra Pradesh. Last year, it bought a strategic 26% stake in the floating LNG import facility being developed by Andhra Pradesh Gas Distribution Corp, a JV between Gail Gas and Andhra Pradesh Gas Infrastructure Corp.
Through Tractebel Engineering, the company recently acquired Cethar Consulting Engineers, which provides support to the Meenakshi project.
This will be the largest inbound acquisition by a strategic investor in Indian utilities space which has been besieged by regulatory and financial woes.
Recently in this space, GMR had put Emco Energy Ltd on block to pare debt and is in talks with various global and local utility companies as well as infrastructure buyout funds for the sale; Jindal Steel was planning to buy a coal based power plant at Nellore, Andhra Pradesh from Kineta Power; NTPC and engineering major L&T were evincing interest in picking up stake in the power plant proposed by Odisha Thermal Power Corporation Ltd, a 50:50 JV between Odisha Mining Corporation and Odisha Hydro Power Corporation