Mumbai/Bangalore: Indian conglomerate GMR Infrastructure Ltd has received five to six unsolicited offers to buy its stake in US-based utility InterGen NV, the group’s chief financial officer said on Monday.
Subbarao Amarthaluru declined to name the firms but said GMR was examining the options.
“We have not yet decided whether to exit or not,” the GMR Group finance head told Reuters in an interview over telephone from Bangalore. “If there is a value proposition, then we will think over it.”
InterGen owns power plants in the United Kingdom, Australia, the Netherlands, Mexico and the Philippines. The company has a combined generation capacity of more than 8,000 megawatts.
Bangalore-based GMR Infrastructure bought 50% of InterGen in 2008 for $1.1 billion from a fund owned by American International Group Inc. The rest of InterGen is owned by Ontario Teachers’ Pension Plan.
“If we are making some money and if we can use that cash for our domestic projects may be that would be a justification, but we have not thought about anything,” Amarthaluru said.
Utility Tata Power Co Ltd was in talks to buy GMR’s InterGen stake for $1-$1.2 billion, a source with direct knowledge of the situation told Reuters last week.
News reports earlier this month said China’s Huaneng Group was also eyeing the holding.
“We don’t have any particular figure in mind. Of course, we would look at the value proposition, which means we need to make some decent returns on this,” Amarthaluru said.
GMR, which builds and manages infrastructure projects such as airports, roads and power plants, has shelved plans to raise up to Rs5,000 crore ($1.1 billion) as it had enough capital to fund its ongoing projects for the next two years, he said. The Bangalore-based firm has raised $315 million by selling shares to institutional investors this year, and another $300 million through private equity placement in its energy unit, GMR Energy.
“This $615 million capital, along with the cash that’s already available in the system would be adequate to meet the equity requirements of all the ongoing projects over the next two years,” Amarthaluru said.
The company hopes to make a public issue in about two years for GMR Energy, whose investors include Singapore wealth fund Temasek.
“You have to go for an IPO to give an exit to the private equity. The timing is something that we need to decide ... timeline could be around two years.”