Singapore-based River Valley Hydro Ventures is close to picking 75% stake
in Secunderabad-based power firm Amritjal
Venture for Rs 300 crore. River Valley
Ventures is looking to invest in hydro power projects in India and other
countries.
The deal would value Amritjal Venture at Rs 400 crore. The
proceeds of the stake sale will be invested by the Indian firm in setting up
hydro power projects in Sikkim, said a person with direct knowledge of the transaction
.
As per the plan, Amritjal Venture is going to float
three special purpose vehicles (SPVs)- Gati Infrastructure, Gati Infrastructure
Bhasmey Power and Gati Infrastructure Sada-Mangder Power. These SPVs will inturn
set up the proposed power projects.
The existing paid up capital of
Amritjal Ventures is about Rs 62.7 crore divided into 2.87 crore equity shares
of Rs 10 each and Rs 3.4 crore optionally redeemable convertible cumulative
preference shares of Rs 10 each. The Secunderabad-based firm is engaged in
generating electricity and investing in power generating companies. It is not
clear who owns Amritjal Venture.
The country's power generating
capacity stands at 1,45,000 megawatt currently, of which hydro power constitutes
about 25%. In the eleventh plan, the government plans to install additional
78,700 megawatt of power with hydro power contributing around 15,627
megawatt.
Several hydro projects were delayed due to relocation and
resettlement problems and India met a little less than half the target of 14,393
megawatt for hydropower generation in the 10th Plan (2002-07). Since progress of
hydro power projects was not up to the mark in the tenth plan, the government
came up with a fresh policy to boost hydro power generation.
The new
policy aims at providing incentives to initiate development of hydroelectric
power projects in the country in an effort to reduce dependence on thermal
power.
National Hydroelectric Power Corporation and Jaiprakash Hydro
Power are among the large hydro power firms in India.
The sector has
witnessed a few private equity deals in the past. In July 2007, Jhunjhunwalas
owned Bhilwara Energy raised Rs 105 crore through a private equity placement to
New York Life Investment Management and Wachovia Corporation.
Source: Economic Times