"TNB has pre-emptive rights on any future issuance of equity or equity-linked securities in GEL," the Malaysian company said.
Tenaga Nasional Berhad, largest electricity utility in Malaysia and one of the largest power companies in Southeast Asia, is picking up 30% stake in select portfolio of GMR Energy through its wholly owned subsidiary, Power and Energy International (Mauritius) Ltd, for a cash pay of $300 million.
"TNB has pre-emptive rights on any future issuance of equity or equity-linked securities in GEL," the Malaysian company said.
"At the time of TNB's investment, GMR Energy will comprise a portfolio of best-in-class power assets, with a total capacity of 4,630 mw. This will include an operating capacity of 2,300 mw and in the pipeline capacity of 2,330 mw under construction assets. In addition, GEL has a balanced fuel mix of coal (2,000 mw), gas (623 mw) and renewable sources of hydro (1,980 mw) and solar energy (25 mw)," TNB said in a release.
Further, Tenaga has the right to invest in Chhattisgarh and other assets at any time within the next five years," GMR Infrastructure Ltd, which would be holding 14.79% stake in GEL post dilution, said in a release.
"The funds invested would primarily be utilised for repayment of corporate debt. This would lead to a reduction in GIL consolidated corporate debt and will result in a stronger balance sheet," the release said.
"TNB will have the right to nominate directors to the boards of GEL and certain key subsidiaries based on its percentage shareholding. It will also have the right to nominate candidates for certain management positions at GEL if it maintains a shareholding of at least 20% in GEL. So long as TNB holds a stake of at least 10% in GEL, TNB will have a veto right, subject to certain exclusions, in respect of a broad range of corporate matters that apply to GEL," the Malaysian company said.
Post the coming on board of the Malaysian company with 30% stake, GMR group would hold 51.7% stake in GMR Energy while Claymore Investment (Mauritius) and IDFC Consortium would control 12.35% and 5.54%, respectively.
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