Tata Power joins race for GMR’s stake in Intergen

Tata Power has joined the race to acquire GMR group’s 50% stake in global power generation firm Intergen NV.

GMR sources said in all, they expect 3-4 companies to make it to the final shortlist of bidders including Chinese major Huaneng, which has already made an approach.

The other 50% stake in Intergen is held by the Ontario Teacher’s Pension Plan.

Tata Power has a total generation capacity of about 3,000 mw and also has significant presence in Saudi Arabia, Bangladesh, Kuwait, Algeria, Myanmar and Thailand.

GMR sources said there have been “several unsolicited enquiries” for buying the Intergen stake.

“A final decision would depend on price and valuations. We see three or four
such enquiries having the potential to reach advanced level of talks, but this process would take some more time,” said one source.

GMR invested close to $1.2 billion to buy the stake in Intergen, which controls 12 power plants in the UK, the Netherlands, Mexico, Australia and the Philippines. However, the returns from these power plants have not been benefiting the group.

It was earlier explained by GMR that the dividends being offered by Intergen do not even match the interest being paid out on the loans taken for funding the acquisition.

That being the case, earlier this month, GMR refinanced a short-term loan of $737 million with another five-year credit line. Apart from Intergen, GMR has promoted 13 power projects totalling about 8500 mw, of which three tantamount to 850 mw are currently operational.