- GMR Energy Ltd. allots 30% stake against receipt of USD 300mn (Rs 2,000 Cr approx.) from Tenaga Nasional Berhad (largest electricity utility in Malaysia)
- Enables significant deleveraging through reduction of Corporate debt
- Creation of a strong platform well poised to capitalize on future growth opportunities in the Power sector
GMR Energy Limited (GEL), a subsidiary of GMR Infrastructure Ltd (GIL) today announced allotment of 30% stake to Tenaga Nasional Berhad, Malaysia (TNB) for a cash consideration of USD 300mn, implying an Equity value of USD 1bn (Rs 6,665 Cr approx.). GEL and TNB had announced this
in May 2016 and the allotment of shares marks the completion of this landmark transaction in the Power sector.
Resultant shareholding of GMR Energy
|GMR Infrastructure and its associates
|Tenaga Nasional Berhad
|Private Equity investors (Temasek, IDFC, etc)
GEL now has a diversified portfolio of coal based, gas based and renewable (Hydro & Solar) power assets having total capacity of 4,630 MW. The portfolio comprises of operating capacity of 2,300 MW and pipeline capacity of 2,330 MW.
With the rich experience that TNB brings in, GEL would be well poised to pursue avenues for growth in future and create further value for all stakeholders.
Through this investment, GMR Infrastructure continues to:
- Reduce its Corporate debt on an ongoing basis thus strengthening its balance sheet,
- Attract foreign capital (both equity and debt)
- Demonstrate the strength of its underlying businesses and its attractiveness to various stakeholders
Commenting on the investment completion, Mr GBS Raju, Chairman, GMR Energy Ltd said:
“We are pleased to welcome on-board Tenaga Nasional Berhad as our strategic partner. This once again re-emphasises GMR’s commitment & ability to successfully execute strategic partnerships to create value for all its stakeholders. This would provide a renewed impetus to our Energy business and result in a stronger balance sheet enabling the company to capitalise on future growth opportunities. Indeed, coming as it does, in the wake of Government reforms, the investment from Tenaga Malaysia heralds the attractiveness of the Indian Energy sector to the foreign investors.”
This Foreign Direct Investment (FDI) from Tenaga Nasional Berhad is the first of its kind in the Indian power sector and represents the underlying strengths of the industry inspite of the headwinds being faced over the last few years.
The transaction is also expected to have a cascading effect on the Indian power sector and pave the way for more foreign investments.
About GMR Infrastructure Limited (GIL)
GMR Group is a leading global infrastructure conglomerate with interests in Airport, Energy, Transportation and Urban Infrastructure. The group has fifteen power generation projects of which ten are operational and five are under development and construction stages. Besides, it has eight operating road assets and a double rail track line between Mughalsarai-New Bhaupur (Kanpur) of Eastern Dedicated Freight Corridor is under development.
GMR Group developed and operates India’s busiest and currently World’s No1 Indira Gandhi International Airport in New Delhi and Greenfield Rajiv Gandhi international airport at Hyderabad. It has also bagged right to develop and operate of Goa’s Greenfield Mopa airport. GMR Infrastructure in partnership with Megawide Construction Corporation is developing Mactan Cebu International Airport (MCIA) in Philippines. The Group is also developing two Special Investment Regions at Krishnagiri and Kakinada and India’s largest Smart Airport City near Hyderabad International Airport.
GMR Group, through its Corporate Social Responsibility arm, GMR Varalakshmi Foundation, carries out community-based development initiatives at 22 different locations in the areas of education; health, hygiene and sanitation; empowerment and livelihoods; and community development.
About GMR Energy Limited (GEL)
GMR Energy is a part of the GMR Group, which is one of the largest diversified Infrastructure Conglomerates in India.
It now has a diversified portfolio of coal based, gas based and renewable (Hydro & Solar) power projects having a total capacity of 4,630 MW. The portfolio comprises of operating capacity of 2,300 MW (1,650MW of coal based, 623MW of gas based and 25MW of Solar capacity). Apart from this, plants of 2,330 MW generation capacities are under various stages of completion/ development in India and Nepal.
About Tenaga Nasional Berhad (TNB)
Incorporated in Malaysia in 1990 as a public company, TNB was listed on the Main Board (now known as the Main Market) of Bursa Malaysia Securities Berhad on 28 May 1992. TNB is the largest electricity utility in Malaysia and one of the largest power companies in Southeast Asia. TNB’s core businesses span the entire value chain of electricity production and supply encompassing Generation, Transmission and Distribution.
While, the Generation Division operates six thermal power stations and three major hydroelectric power generating schemes in addition to supporting the operations and maintenance of three Independent Power Producers (IPPs), the Transmission Division connects power generated by TNB and IPPs throughout Peninsular Malaysia with Distribution’s network as well as directly to large industrial customers via the National Grid. The Distribution Division supplies end users, with a keen focus on delivering a world-class customer experience.
Through its subsidiaries, TNB is also involved in energy-related operations such as the manufacture of transformers, high-voltage switchgears and cables; the provision of professional consultancy services; architectural, civil, electrical engineering works and services, and repair and maintenance.
TNB is a blue chip company listed on the Bursa Malaysia with a market cap of ~US$19.4bn. In FY’15, TNB generated a turnover of ~US$11.1bn and an EBITDA of ~US$3.5bn.
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