New Delhi: Seeking support of Tata Power shareholders against promoters’ proposal to remove him from the board, Cyrus Mistry has said that the company fared better than most of its competitors during his tenure.
The company has called an extraordinary general meeting (EGM) on 26 December 2016, to consider the resolution on Cyrus P. Mistry’s removal as its director. “At the consolidated level for Tata Power,...efforts resulted in a marked improvement EBITDA over the last three years. There has been a re-rating of the power sector in India over the last few years, and hence it would not be appropriate to compare its performance vis-a-vis Sensex. However, the company has fared better than most of its competitors during this time,” Mistry said in a letter to shareholders.
Mistry joined the board of Tata Sons in 2006 and was appointed chairman in December 2012. He is currently chairman of Tata Power. He said that Tata Power faced several challenges in 2012 and the overwhelming threat to its survival was on account of situation at Mundra Ultra Mega Power Project (Coastal Gujarat Power Ltd or CGPL).
As per the letter, CGPL had been set up to almost double the generation capacity of the company with a huge capital investment of $2.6 billion and the plan was to use Indonesian coal.
Tata Power had invested $1.2 billion in coal assets, to secure low coal supply. However, regulatory changes by the Indonesian government challenged the viability of the project. Tata Power has filed a petition in central electricity regulatory commission and the matter is in the courts, it added. Earlier this week power regulatory CERC has allowed Tata Power to pass through the increased cost of coal due to change in regulation by Indonesia. However, the relief is subject to approval of Supreme Court where matter is still sub judice.