Singapore-based energy, water and marine group Sembcorp Industries has signed a conditional agreement to acquire 45 percent stake in NCC Power Projects (NCCPP), which is currently building a 1,320-megawatt coal-fired power plant in Andhra Pradesh for a consideration of Rs.848 crore, reports said.

NCCPP is jointly owned by Gayatri Energy Ventures Ltd. (GEVPL) and NCC Infrastructure Holdings Ltd. (NCCIHL), a subsidiary of Indian conglomerate, NCC Ltd. (NCCL). Gayatri is Sembcorp’s project partner for another power plant in Nellore district of Andhra Pradesh.

Sembcorp Group President and CEO Tang Kin Fei said, “With our first power project in India progressing well and on track for completion this year, we are now pleased to embark on our second power plant investment there. This acquisition will provide the opportunity for Sembcorp to increase our foothold in India’s power market, where we see opportunities for our business to grow significantly in the years to come.”

Once the deal materializes, Sembcorp will hold 45 percent of NCCPP, while the remaining 55 percent will be held by NCCIHL.

NCCPP’s upcoming plant is located on a site adjacent to Thermal Powertech Corporation India Ltd. (TPCIL), Sembcorp’s first power plant investment in India.

Presently, the NCCPP project is around 30 percent completed and it is expected to come on-stream in early 2016. 

The project has also achieved financial closure, with 75 percent of the project cost funded through long-term limited recourse rupee-denominated project finance loans and the remainder funded by shareholders’ equity.

The project will be fuelled by both domestic and imported coal. It already received a Letter of Allocation for its domestic coal supply from Coal India.

The transaction is subject to the fulfilment of conditions, including approvals from the relevant authorities and the lenders.

Additional conditional agreements would also be entered into giving Sembcorp the right and obligation to take an incremental 20 percent stake in NCCPP and an incremental 16 percent stake in TPCIL respectively, subject to and upon the respective projects having obtained requisite formal approvals by relevant authorities in India.

by RTT Staff Writer

source: http://www.rttnews.com / RTT News / Home> Business> Indian News / February 03rd, 2014