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Malaysian firm invests 2,000 cr in GMR Energy
Malaysia’s largest power utility player, Tenaga Nasional Berhad (TNB), has invested $300 million (approximately Rs 1,997 crore) in GMR Energy Limited (GEL), a part of infrastructure major GMR Group.
Fund infusion to reduce GIL’s consolidated corporate debt, strengthen balance sheet
Hyderabad: Malaysia’s largest power utility player, Tenaga Nasional Berhad (TNB), has invested $300 million (approximately Rs 1,997 crore) in
GMR Energy Limited (GEL), a part of infrastructure major GMR Group.
“The management committee of GMR Infrastructure Limited (GIL) on Monday approved the proposed primary capital investment by Tenaga in GEL. The investment represents 30 per cent equity stake in a select portfolio of GEL assets on a fully diluted basis,” the company said in a statement.
The funds invested would primarily be utilised for repayment of corporate debt. This would lead to a reduction in GIL’s consolidated corporate debt and will result in a stronger balance sheet.
Moelis and Company acted as the financial advisor to GEL. While for Tenaga, Credit Suisse AG acted as the transaction advisor. Through this partnership, the GMR Group is bringing a world-class power developer and operator to the Indian market.
Tenaga’s experience would further facilitate GEL in improving the performance of its operational assets and develop its under-development pipeline of hydro and renewable energy assets, the company added.
According to the company, GEL will manage a balanced portfolio of coal-based, gas-based and renewable (hydro and solar) power projects having a total capacity of 4,630 Mw. This portfolio would have an operating capacity of 2,300 Mw and pipeline capacity of 2,330 Mw. Further, Tenaga has the right to invest in Chhattisgarh and other assets at any time within the next five years.
“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’. This is being effectively led by the Finance Ministry’s efforts on improving the ease of doing business and Power Ministry’s strong commitment to reform the sector.
We believe our partnership with a major power sector player like Tenaga is one of the steps to implement the Prime Minister’s vision,” said GM Rao, Group Chairman of the GMR Group.
Tenaga, with an installed capacity of 10,818 Mw, currently has a 50 per cent market share of the Malaysian grid’s generation capacity. Listed on the Bursa Malaysia with a market capitalisation of $20 billion, TNB has the strong pedigree and backing of the Malaysian government. It generated a turnover of $10.3 billion and earnings before interest, taxes, depreciation, and amortisation (Ebitda) of $3.3 billion in FY15.
“This collaboration once again signifies GMR’s commitment and ability to successfully execute strategic partnerships to create value for all its stakeholders. This would provide a renewed impetus to our energy business and result in a stronger balance sheet, enabling the company to capitalise on future growth opportunities,” said GBS Raju, Chairman of GMR Energy. GMR Infrastructure Limited’s scrip ended the trade at Rs 12.47 on the BSE on Monday, up 0.81 per cent, over the previous close of Rs 12.37.
