Mumbai: French energy producer Engie SA said on Thursday it will sell its majority stake in the 1,000 megawatt (MW) Meenakshi Energy coal-fired thermal plant in Andhra Pradesh to India Power Corp. Ltd, a Kanoria family trust entity with interests in wind and thermal power.

It did not disclose the value of the deal.

The announcement came as Engie reported around $9.6 billion in write downs on its oil and gas activities for calendar year 2015 and sold 12 gigawatt (GW) of capacity in the US and Indonesia. The company said it would also cut dividends from 2017.

Mint reported in December that Engie had put its 1,000 MW Meenakshi power plant in India on the block as it sought to exit all coal-fired projects, citing three people familiar with the matter. The plant has an operational capacity of 300 MW with 700 MW under construction.

Engie, formerly known as GDF Suez SA, bought a 74% stake in Meenakshi Energy Pvt. Ltd, the company operating the power plant, from Hyderabad-based Meenakshi Energy and Infrastructure Holdings Pvt. Ltd in 2013 for an undisclosed sum. It gradually increased its stake to 89%.

Engie bought the stake after valuing the Meenakshi plant at an enterprise value of $760 million, Mint had reported in 2013. This could not be verified from Engie or India Power.

In October, Engie said all its new investments in power production would be in renewable energy and natural gas projects that emit little or no carbon dioxide. “This economic and ecological decision to build no further coal-fired power plants, leads to stop all projects which had not yet been firmly committed," said the company, in which the French government holds a 33% stake.

Engie said on Thursday it has sold a total of 13 GW of power generation assets—10 GW of merchant power generation capacity in the US, 1 GW of Meenakshi and 2 GW of the PT Paiton coal-fired power plants in Indonesia.

Engie expects these disposals to bring in a net debt reduction of €5.5 billion, it said in a statement.

India Power chairman Hemant Kanoria told Mint on Thursday his company has entered into an agreement with Engie to acquire the 89% in Meenakshi Energy and that the two companies are working on the details of the deal. Kanoria also heads the infrastructure finance firm Srei Infrastructure Finance Ltd. Like India Power, Srei is also held under the family’s trust Kanoria Foundation.

The Meenakshi plant has a debt of 3,000 crore and would need additional debt of 200-300 crore to construct the planned 700 MW capacity over the next 18 months, Kanoria said. India Power had been looking to buy stressed assets in thermal power to grow its own capacity, he said.

A lack of power-purchase agreements with the state electricity boards has affected most of the power plants commissioned in the past three years, forcing them to stay idle as supply far outstrips demand.

India Power operates 95.2 MW of wind assets in Rajasthan, Gujarat and Karnataka, and a 12 MW coal-fired thermal power station in Asansol, West Bengal. It is also developing a 450 MW thermal power plant in Haldia, West Bengal.

Jefferies India acted as the financial advisor to India Power in this deal.

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