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Patel Engineering to divest 10% in energy unit

Patel Engineering to divest 10% in energy unit
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First Published: Tue, Mar 09 2010. 11 48 PM IST
Updated: Tue, Mar 09 2010. 11 48 PM IST
Mumbai: “Construction firm Patel Engineering Ltd will divest at least 10% in its power generation company Patel Energy to a strategic investor or a private equity firm,” managing director Rupen Patel said on Tuesday. He declined to say how much the company was hoping to raise through the stake sale.
“The board will meet in a month’s time and decide the dilution,” he said, adding that it could be a private equity or strategic investors, or even an initial public offer (IPO).
“But right now it is too early to talk about it because power stocks are at their best value,” Patel told Mint.On Tuesday, Patel Energy, which is is building a 1050 mega watts plant in Nagapattinam, Tamil Nadu, got approval for assured supply of coal from the government.
The company is spending Rs5,000 crore on the plant that is expected to be commissioned in three years. At least 80% of the money for the project will be raised through debt and the rest through equity. The company may also have to get into long term coal purchase agreements in Indonesia or Vietnam, Patel said. Patel Energy expects to sell 65% of power generated through long term power purchase agreements and the rest through higher merchant power rates.
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First Published: Tue, Mar 09 2010. 11 48 PM IST