Lanco Infratech has roped in the Navin Jindal-owned Jindal Steel and Power, to fill in the shoes of global power operator Globeleq.
HYDERABAD: Lanco Infratech has roped in the Navin Jindal-owned Jindal Steel and Power (JSPL), to fill in the shoes of global power operator Globeleq, which has “technically” exited from the Rs 16,000 crore Sasan Ultra Mega Power Project.
The Hyderabad-based group has managed to hold on to the 4000 MW project by acquiring 60% interest of Globeleq Ltd in Globeleq Singapore (GS), through its Mauritius-based holding company, Princestone Investments Ltd.
JPSL has acquired the remaining 40% of Globeleq’s holding in Globeleq Singapore.
Though Globeleq has exited from Sasan, it continues in name with Globeleq Singapore, which holds 70% equity in the project, being acquired by Lanco and JSPL, which was one of the pre-qualified bidders for the project.
The 60:40 equity in GS translates into an indirect equity of 72% in Sasan for Lanco and 28% for JSPL, J Suresh Kumar, CFO, Lanco Infratech told DNA Money.
Further JSPL has an option of increasing their stake to 49% in Sasan, he added.
The first step the new board of Globeleq Singapore was to accept and sign the letter of intent awarded to the consortium on December 28 for the Sasan project which the combine had won after bidding aggressively against such players like the Tatas and Reliance Energy.
DNA Money was the first to report on Wednesday of Lanco Infratech’s efforts to find another partner to fill in Globeleq’s shoes in the Sasan project.
The RFQ or request for quotation for Sasan mandates that the technical requirement should be met by the lead member of the consortium who should hold at least 26% equity. JSPL being one of the pre-qualified bidders for Sasan makes life easier for the new partners.
“Globeleq will retain its interest in the Sasan under the new ownership structure and going forward will execute the project with financial and technical support from JSPL, LITL and its affiliates,” a Lanco statement said.
A Globeleq Ltd statement said Globeleq Singapore Pvt Ltd will not retain interests in any Globeleq power businesses or projects, adding that the group was focused on building and operating medium-sized power generation businesses around the world.
“Given that Globeleq is currently selling its operating power businesses, this is a positive result for the Sasan and the Indian power sector,” the statement added.
JSPL, with a cash flow of over Rs 1,000 crore and a market cap of Rs 7,500 crore has the necessary expertise. It also has coal mining interests which are an added advantage for the project, Suresh Kumar said.
Talk of a possible exit by Globeleq, which is the lead member of the consortium and the technical partner, started with news of the group putting up several assets in Egypt, Asia and Africa for sale.
“We have our internal cash flow and some of the IPO money is still left with us,” Suresh Kumar said when asked how Lanco would raise the money for the additional equity in Sasan.
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