Mumbai, March 4: Infrastructure major GMR Group will sell its 70 per cent stake in GMR Energy (Singapore) Pte Ltd (GMRE) to FPM Power Holdings Limited for Singapore $660 million (Rs 2,900 crore).
“GMR Group has entered into a share purchase agreement on March 4 to sell its 70 per cent interest in GMRE to FPM Power Holdings Ltd for a total equity value of Singapore $660 million,” the company said in a statement.
Of this, FPM Power will invest Singapore $60 million in GMRE as balance equity, GMR said in a statement. The sale translates to an enterprise value (100 per cent basis) for GMRE of Singapore $1,612 million ($1.29 billion) on completion of the project by 2013.
The transaction is subject to approval from project finance lenders and is expected to close by the end of March.
GMR said the divestment of the stake resulted in a profit of Rs 1,356 crore (Singapore $307 million) and would release capital amounting to Rs 1,616 crore (Singapore $366 million).
GMRE was established for the construction, operation and maintenance of a 2X400 megawatt (gross) natural gas-fuelled power plant in Jurong Island, Singapore. The plant is nearly 96 per cent complete and expected to commence operations by the end of 2013.
“The GMR Energy Singapore project is on schedule and within the budget. The divestment is an off-shoot of the group’s well thought-out strategy of an Asset Right — Asset Light and Cash Flow-based model that the group has embarked on the recent times,” group chairman G.M. Rao said in a statement.
“GMRE is a solid testimony of GMR’s ability to identify a good opportunity, develop and execute a world class power project of high efficiency in a developed country such as Singapore,” Rao said.
GMR Infrastructure (Singapore) Pte Ltd holds 66.4 per cent in GMRE and 3.6 per cent is owned by GMR Infrastructure Ltd. The balance 30 per cent are with Petronas, who will continue to stay invested in the project.
FPM Power, a Singapore-based company, is a 60:40 joint venture between First Pacific Company Limited and Meralco Power Gen Corporation, a wholly owned subsidiary of Manila Electric Company.
Macquarie Capital India and Standard Chartered Bank jointly advised GMR on the transaction.
The GMR Infrastructure scrip closed at Rs 18.80, up 4.74 per cent from the previous close, on the Bombay Stock Exchange.