Gayatri Projects completes sale of power assets to Singapore-based Sembcorp

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Gayatri Projects Limited has concluded the sale of its 5.95% stake in the power assets of Sembcorp Energy India Limited (SEIL). The stake—held through its material subsidiary Gayatri Energy Ventures—was sold for around Rs 4068 million. The company had signed a non-binding definitive agreement in December last year for sale of its power assets to Singapore-based integrated energy player Sembcorp.

Out of the cash proceeds from the above sale, Rs 2068.50 million would be used towards repayment of debentures issued by Gayatri Energy Ventures to ECL Finance Limited and Edelweiss Credit Opportunities Fund. The balance amount would be used to meet the working capital requirements of the company and for other corporate purpose.

On the other hand, the acquisition allows Sembcorp to have the flexibility as sole owner to evaluate and pursue a full range of growth opportunities in the renewables segment, while at the same time seeking the right equity window to list its India business or to pursue other capital recycling options.

“The transaction is based on a basic value of Rs 70 billion for SEIL. Gayatri Projects Limited will realise the full value of its stake whenever a market discovered value is available. So if SEIL goes for IPO, stake sale, etc, Gayatri Projects Limited will receive the difference between the market value and base value of Rs 70 billion”—read a statement by Gayatri Projects Limited.

Gayatri Energy Ventures Private Limited was incorporated by Gayatri Projects Limited for the purpose of investment in power projects, at an equity investment of Rs 6398 million and funding in the form of unsecured loan amounting to Rs 1403 million as of September 30, 2019.

“The said subsidiary company [Gayatri Energy Ventures] has incurred considerable losses and there has been significant erosion in net worth of the investment made by the company”—read a company statement.

SEIL—formerly Thermal Powertech Corporation India—is an independent power producer in India focused on growing a clean energy portfolio. At present, it has a diversified portfolio of thermal and renewable energy assets of more than 4,300 MW. Its solar assets are located in the states of Rajasthan and Gujarat.