Singapore state investment firm Temasek Holdings is in talks to buy a stake worth $170 million in GMR Infrastructure Ltd.'s energy unit, a person familiar with the situation said Wednesday. “Temasek is one of around five companies that have shown interest in GMR Energy,” the person, who declined to be named, said. “They've been talking since last year.”
GMR Infrastructure, the listed unit of GMR Group, has said in October it is planning to sell a 10% to 15% stake in the energy unit and may offer shares through a private placement and an initial public offering.
GMR group Chief Financial Officer A Subba Rao declined to comment on a potential deal with Temasek, saying it is not the company's policy to reveal any details on a deal until it reaches a definitive stage.
But Mr. Subba Rao said GMR group is seeking to raise capital to meet the energy unit's expansion needs.
“For the energy division, we have already tied up funds for 18 months, and are now looking to raise around 15 billion rupees ($328.2 million) for the remaining period, in tranches,” said Mr. Subba Rao.
India's power sector is seeing a flurry of plant constructions as the world's second-fastest growing economy is hungry for electricity to run its factories and light its homes. Demand far outstrips supply of power, leading to frequent blackouts in urban and rural areas.
GMR Energy runs three power plants in India with a combined capacity of 822 megawatts. It is also developing power projects of another 3,200 MW capacity.
Apart from running several power plants, GMR Group also builds and operates highways and airports. The company runs the domestic and international airports in Delhi and Hyderabad.
Source: WSJ