GMR Infrastructure has announced that its wholly-owned subsidiary GMR Energy (GEL) has acquired 5 percent equity stake in South Africa’s Homeland Mining and Energy SA (Pty) Ltd, a unit of Canada’s Homeland Energy Group Ltd.
GEL has paid Rs 60 crore ($15 million) for the 5 percent stake in the company.
Further GEL has an option to purchase an additional 45 percent in the same company by September 2008 for $145 million. In this way, the total payout for the 50 percent stake is $155 million (approx. Rs 620 crore).
In a statement, GMR Infrastructure said, “This acquisition would ensure fuel security for GMR group's power projects in India and such a transaction also acts as a catalyst in the development of the energy business of the Group.”
The recent transaction is linked with the projects and properties that held within Homeland’s South African subsidiary including the Kendal Mine, Eloff coal mining project, the Northfield site reclamation project in addition to exploration projects in South Africa.
GMR Energy is in the throes of accomplishing two coal fired power plants with a total generation capacity of 3150 mega watt (MW) in Orissa and Chattisgarh.
Presently, GMR Energy owns three power plants operational generating 800 mw, none of which are on coal. Besides the two thermal projects, GMR Energy is tying up with four more projects across India.
According to a statement from GMR Infrastructure, Homeland Mining holds license for various coal mining projects in South Africa. The acquisition would guarantee fuel security for GMR Group’s power projects in India and such a deal also acts as a medium in the development of the energy business of the Group.
Source: Top News