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CESC wins consultancy in Nigerian discom

Posted on Nov 09, 09:02PM | IANS

RP-Sanjiv Goenka Group flagship company CESC has won a consultancy assignment in a Nigerian power distribution company fetching an annual fee of USD 2.5 million, company chairman Sanjiv Goenka said here Friday.

"The CESC through a consortium of Nigerian partners and investment firms has bagged the Port Harcourt project through competitive bidding," said Goenka.

"Apart from the annual fee of USD 2.5 million, we would be entitled to incentives on achievement of more than 80 percent of distribution loss reduction target with each of the partners in the consortium getting 12.5 percent of the additional revenue," he added.

The Port Harcourt area covers 48,000 sq. km and the annual turnover for the distribution company will be USD 180 million.

Though the company does not have any investment obligation, it has the option to invest up to six percent in the distribution company through a special purpose vehicle (SPV).

Goenka also said the process of listing retail arm Spencer's, was underway. A merchant banker would be appointed to provide a road map for the listing.

"We have in-principle decided to list the company. It's a good time to list Spencer's as the firm is steadily moving towards profitability. Investors are eyeing the sector with the government allowing overseas investment in multi-brand retail," Goenka said.

Spencer's is a wholly owned subsidiary of CESC.

"Besides an initial public offer, we could do a mirror image demerger or induct a strategic investor," said Goenka.

In a mirror image demerger, the shareholding of Spencer's will be exactly that of holding firm CESC.

Goenka exuded confidence about Spencer's performance and said: "In 2011-12, brought down its losses to Rs.220 crore from Rs.253 crore in the last fiscal."