TNB Invests in 30% Stake in India’s GMR Energy for US$300 Million
New Delhi, 9 May 2015 – Tenaga Nasional Berhad (“TNB”) today announced its entry into India’s rapidly expanding power sector after it signed a Subsciption Agreement (“SA”) and Shareholders Agreement (“SHA”) to invest in a 30% stake in Indian power company, GMR Energy Limited (“GEL”), for US$300 million.
The transaction is expected to be completed within the next three to six months. It will also cement a strategic partnership with GMR Infrastructure Limited (“GIL”), one of India’s largest infrastructure development conglomerates with businesses spanning energy, airports, transportation and urban infrastructure.
GEL, a subsidiary of GIL, has a portfolio of five operational power assets comprising coal, gas and Renewable Energy assets with a combined generation capacity of 4,630MW. An additional four power asets are currently under various stages of completion in India and Nepal with a combined generation capacity of 2,300MW.
Datuk Seri Ir. Azman Mohd, President/Chief Executive Officer TNB said “TNB’s investment in GEL Energy meets all its investment criteria as this deal delivers tremendous potential and unlocks significant value. It places TNB in prime position to benefit from India’s superior long-term electricity consumption growth potential, in one of the world’s largest emerging economies. It also offers multiple avenues for growth in India’s power sector, beyond generation, with the prospect of pan- Indian development.
“We welcome the opportunity to enter into a long-term working relationship with a best-in-class strategic partner with in-depth knowledge of the Indian power market, bring together our respective strengths and unleash synergies that will allow TNB to create a strong foothold and maximise opportunities inherent in the Indian power market which is adding 20GW of power annually.”, he added.
The investment, which will be financed by a combination of internal funds and/or external debt, is subject to the fulfilment of several conditions including obtaining regulatory approvals from relevant regulatory authorities both in India and Malaysia.
The advisors for this agreement include Credit Suisse (Exclusive Financial Advisor), Slaughter & May and Khaitan & Co (legal counsels) and KPMG India Private Limited (Transaction Due Diligence, Regulatory and Commercial Advisor).
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