NCC to sell majority stake in power assets to Sembcorp for Rs 352 crore

Industry:    2016-03-16

Infrastructure firm NCC has announced sale of 51% stake in thermal power assets to Singapore global utilities services firm Sembcorp for Rs 352 crore as part of a move to monetise assets in non-core diversifications. In a communique to stock exchanges on Monday, NCC said it has entered into share sale agreement with Sembcorp Utilities Pte Ltd “as a part of its strategic initiatives to divest the stake held in the various SPVs in which it has invested”. NCC said it will sell stake held in Sembcorp Gayatri Power, formerly NCC Power Projects, which is implementing 1,320MW coal-fired power project, in favour of Sembcorp for a gross consideration of Rs 352 crore. NCC’s senior finance executive YD Murthy said the deal will enable Sembcorp emerge as the majority shareholder in the joint venture thermal power firm to manage the company along with another partner Gayatri Projects. The move helps Sembcorp increase its Indian power portfolio to 2,640MW, at Krishnapatnam in Andhra Pradesh, making it one of the largest global investors in the Indian energy sector. Sembcorp, which had couple of years ago planned to buy 55% stake in the joint venture power firm, had to confine to minority stake owing to regulatory hurdles in the Indian energy sector that prohibited majority partner in the power venture with coal linkages to exit the project completely. In a communique to shareholders in its latest annual report, NCC had said, “The government has issued a memorandum that allows the original promoters of a power plant to exit if significant level of investment has been made in the project.” NCC, backed by global private equity firm Blackstone Group LP and Indian ace stock broker Rakesh Jhunjhunwala, had initially proposed a 1,320MW thermal power project at Sompeta in Srikakulam district of AP. However, following violent protests by local farmers and fishermen against the power project, NCC had to shift its project location to Krishnapatnam.

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