Videocon to sell 25% in power arm to PE firms

Videocon Industries Ltd is in talks with private equity players to place 25% stake in its power arm and hopes to conclude the deal by April, chairman Venugopal Dhoot said on Tuesday.

“We are developing power projects through our special purpose vehicle Pipavav Energy Ltd, which we have now renamed as Videocon Power Ltd. Some private equity (PE) funds have approached us and we are talking for placement,” Dhoot said. He, however, did not disclose the amount the company may raise from such private equity placement.

Shares of Videocon Industries on Tuesday ended at Rs 234.85 on the National Stock Exchange, up 6.7% from Monday. Consumer durables major Videocon, which has diversified into fields such as oil & gas and power, is setting up a thermal power plant of capacity of 1,200 mw in Gujarat.

“The total investment is 6,000 crore in the Gujarat project. We have already tied up 80% of the debt component with IDBI, State Bank of India and Rural Electrification Corp,” Dhoot said.

The project is likely to achieve financial closure in one month, and would be completed in 42 months. Besides the Gujarat project, the company is also setting up power projects in West Bengal and Chhattisgarh of 1,200 mw capacity each.

“The total investment on the three projects would be 18,000 crore that will be funded in the debt-to-equity ratio of 75:25,” Dhoot said. The company hopes to complete the Chhattisgarh project in four years, and the West Bengal project in five years. “Oil & gas, and power would be key growth areas for Videocon Industries,” he said.