SINGAPORE - Sembcorp Industries said on Tuesday that its fully-owned utilities subsidiary, Sembcorp Utilities has signed a joint venture agreement with Gayatri Energy Ventures (GEVL) to invest in a 49 per cent stake in Thermal Powertech Corporation India (TPCIL) for about Rs 1,042 crores (S$319 million).
TPCIL is set to build, own and operate a coastal power plant in Krishnapatnam, SPSR Nellore District, Andhra Pradesh, India.
Completion of the acquisition is expected to take place in mid-2010.
GEVL, a wholly-owned subsidiary of Gayatri Projects, an established construction company which is publicly listed on the Bombay Stock Exchange, will continue to hold the remaining 51 per cent stake in TPCIL.
TPCIL will invest approximately Rs 6,869 crores (S$2.1 billion) to build, own and operate a 1,320 megawatt coal-fired power plant in Krishnapatnam.
The plant will be operated and maintained by an O&M company, which will be 70 per cent owned by SembCorp and 30 per cent owned by GEVL, and for which SembCorp and GEVL also signed a separate joint venture agreement on Tuesday.
Expected to begin the full commercial operation of its two 660-megawatt units by end-2013, the power plant will be 70 per cent fuelled by low sulfur non-coking coal allocated by a wholly-owned subsidiary of Coal India, a public sector undertaking under India's Ministry of Coal. The remaining coal will be sourced from overseas.
About 75 per cent of the project cost is expected to be funded through debt financing and the remaining 25 per cent through shareholders' equity.
The funding will be in Indian Rupees and commitments from Indian financial institutions for a substantial portion of the total debt have already been received.
The signing of the financing documentation is expected to take place by end-June 2010. Capital Fortunes is the project financial advisor appointed by the project company, the sole arranger of project financing with the domestic financial institutions and banks as well as the arranger of Sembcorp's participation in the project as a foreign investor.
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