GMR Energy Ltd, part of the Hyderabad-based GMR group, is looking for global acquisitions in the power sector and said it has identified projects in Singapore and Turkey.
An analyst said that such acquisitions could boost the company’s prospects in India, especially its credentials to bid for large power generation projects in India including ultra mega power projects (UMPP) which have a generation capacity of 4,000MW.
GMR Energy is keen to buy “power assets in Singapore currently owned by Temasek Holdings, the investment arm of the Singapore government,” said Raaj Kumar, the company’s chief executive officer. He added that Temasek had recently put “2,670MW of assets” on the block and that the company had “qualified” to bid for the same.
G.M. Rao, chairman, GMR Group
Mint could not confirm over the weekend if Temasek has put up any of its power assets for sale. Temasek owns Singapore Power Ltd and, through it, SP Assets Ltd.
The assets GMR Energy has identified in Singapore are valued at between $1.5 billion (Rs5,955 crore) and $2 billion, according to Kumar. GMR had earlier failed in its attempt to acquire the assets of international power firm Globeleq in Asia and Egypt.
GMR Energy said it has also initiated the due diligence process to bid for some of the major power projects available for sale in Turkey. “We are pursuing the inorganic growth opportunities in Turkey, where over 3,000MW of power assets are up for sale along with lignite mines,” Kumar said. He declined to reveal the valuation of these assets.
The GMR group already has a presence in Turkey where one of its subsidiaries, GMR Infrastructure Ltd, has a 40% stake in a consortium developing the Sabiha Gokcen International Airport in Istanbul (Malaysia Airport Holding has the balance).
As part of its backward integration plans in the power business, GMR Energy, which is the holding company for the power ventures of the group and a subsidiary of GMR Infrastructure, is also in the process of bidding for coal assets in South Africa and Indonesia.
“We have participated in bids for coal mines in South Africa and Indonesia. While we expect the bids in South Africa to be finalized during the first half of December, the bids for Indonesian coal mines are expected to be cleared sometime during the first half of the next year,” said Kumar.
He added that the small coal mines in South Africa were valued at around $0.5 billion, while large mines in Indonesia were expected to cost between $1.5 billion and $3 billion.
Mint reported on 27 November that Reliance Power Ltd is looking to invest $1 billion in acquiring overseas coal blocks to secure coal supplies for its 4,000MW imported-coal-based ultra mega power project at Krishnapattnam in Andhra Pradesh.
Tata Power Co. Ltd recently paid $1.1 billion for a 30% stake in two coal mining units and a trading company belonging to Indonesia’s PT Bumi Resources. Tata Power will use coal from these mines at its imported-coal-based UMPP at Mundra in Gujarat.
For the quarter ended September, GMR Infrastructure posted net operating revenues of Rs395.31 crore and a net profit of Rs70.60 crore.
“(The) energy sector is hot and GMR does not want to miss the train. If it acquires Temasek’s operational assets abroad, it will ‘pre-qualify’ to bid for big-ticket projects in India as well, apart from having strong cash flows to fund other projects in India,” said a Mumbai-based power sector analyst, who did not wish to be identified.
GMR Energy has eight power plants, of which three are in operation; the rest are being developed.
Shares of GMR Infrastructure gained 3.02% to close at Rs254.50 each on the Bombay Stock Exchange on Friday, on a day when the exchange’s benchmark index Sensex gained 1.9% to close at 19,363.19 points.