/press-releases

Tenaga Nasional Berhad picks up 30 percent equity stake in GMR Energys select portfolio of assets

Induction of a strong strategic partner to provide renewed impetus to Energy business & create strong growth platform

Investment to result into strengthening of balance sheet through reduction of corporate debt

The Management Committee of GMR Infrastructure Limited today approved the proposed primary capital investment by Tenaga Nasional Berhad Tenaga in GMR Energy Limited. The investment represents 30 percent equity stake in a select portfolio of GEL assets on fully diluted basis, for cash consideration of USD 300mn.

Tenaga is the largest power utility player in Malaysia with an integrated presence across the value chain of power generation, transmission & distribution. With a total installed capacity of 10818 mega watt and 50 percent market share of the Malaysian grids generation capacity, it has strong pedigree and backing of the Malaysian government. Further, it has significant experience in managing and operating power assets with several thermal power plants, large hydro plants, power distribution business and supporting OandM of independent power producers all over Southeast Asia, South Asia and Turkey.

Through this partnership, GMR Group is bringing a world class power developer and operator in Indian market. Tenagas experience would further facilitate GEL in improving the performance of its operational assets and develop its under development pipeline of hydro and renewable energy assets. The synergies that would be created will lead to a long and strong partnership benefiting both GEL and the Indian Power sector.

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.

GEL will manage a balanced portfolio of coal based, gas based and renewable Hydro and Solar power projects having a total capacity of 4630 mega watt. This portfolio would have an operating capacity of 2300 mega watt and pipeline capacity of 2330 mega watt.

Further, Tenaga has the right to invest in Chhattisgarh and other assets at any time within the next five years.

Commenting on the development, Mr GM Rao, Group Chairman, GMR Group, said “India’s substantial and sustained economic growth will require collaboration from all stakeholders in the power sector. Hon. Prime Minister of India has set a vision of 24x7 Power for All by 2022. This is being effectively led by Finance Ministrys efforts on improving the ease of doing business and Power Ministrys strong commitment to reform the sector. We believe our partnership with a major power sector player like Tenaga is one of the steps to implement the Prime Ministers vision.”

Mr GBS Raju, Chairman, GMR Energy added: “We are very happy to have Tenaga as our strategic partner. This collaboration once again signifies GMRs commitment and ability to successfully execute strategic partnerships to create value for all its stakeholders. This would provide a renewed impetus to our Energy business and result in a stronger balance sheet enabling the company to capitalise on future growth opportunities”.

Advisors

Moelis & Company acted as the financial advisor to GEL. White and Case LLP, Cyril Amarchand Mangaldas and Krishnamurthy and Co. acted as legal counsel for GEL.

While for TNB, Credit Suisse AG acted as the transaction advisor Slaughter and May and Khaitan and Co acted as the legal counsel and KPMG was the regulatory and financial advisor.

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For Further Information, please contact:

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  • Yuvraj Mehta
  • Ritesh Mehta
  • Group Head & VP – Corporate Communications
  • Manager - Corporate Communications

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