GMR enters into SPA with FPM Power
New Delhi, Mar 5 : Infrastructure major GMR Group on Monday entered into a Share Purchase Agreement ("SPA") to sell its 70pc interest in GMR Energy (Singapore) Pte Ltd ("GMRE") to FPM Power Holdings Limited ("FPM Power") for a total equity value of SUSD 660 Mn.
Out of this, FPM Power will invest S$ 60 Mn in GMRE as the Balance Equity.
This sale translates to an Enterprise Value (100% basis) for GMRE of S$1,612 Mn (US$1,293 Mn) on project completion by end 2013.
The transaction is subject to approval from Project Finance lenders to GMRE and is expected to close by end of March, 2013.
This divestment of our stake results in a profit of Rs. 1356 Crores (S$ 307 Mn) and releases capital amounting to Rs. 1616 Crores (S$ 366 Mn).
GMRE is a company established for the construction, operation and maintenance of a 2X400 MW (gross) Natural Gas fuelled power plant on Jurong Island, Singapore.
The GMRE power plant is nearly 96% complete and expected to commence operations by the end of 2013.
GMR Infrastructure (Singapore) Pte Ltd owns 66.4% of GMRE and 3.6% is held by GMR Infrastructure Limited. The balance 30% stake in GMRE is held by PETRONAS who will continue to stay invested in the project.
FPM Power is a 60:40 Joint Venture established between First Pacific Company Limited ("First Pacific") and MERALCO Power Gen Corporation ("MPG"), a wholly-owned subsidiary of Manila Electric Company ("MERALCO").
G. M Rao, Group Chairman stated: "GMR Energy Singapore is a solid testimony of GMR's ability to identify a good opportunity, develop and execute a World Class Power Project of high efficiency in a developed country like Singapore. The project is completely on schedule and within the budget."
"The divestment is the off-shoot of the Group's well thought out strategy of an Asset Right - Asset Light and Cash Flow based model that the Group has embarked in the recent times. This is the second such strategic move after last month's divestment of 74% stake in the GMR Jadcherla road project at a premium.
"The Cash flows will help GMR Energy to focus on our Domestic Energy Business & accelerate ongoing Projects totaling to 5790 MW," he said.
Macquarie Capital India and Standard Chartered Bank have jointly advised GMR on this transaction.