GMR to sell 30% stake in its Singapore unit to Petronas

GMR to sell 30% stake in its Singapore unit to Petronas

Mumbai: Bangalore-based GMR group has agreed to sell a 30% stake in GMR Energy (Singapore) Pte Ltd to Petronas International Corp. Ltd, a unit of Malaysian government-run Petroliam Nasional Bhd (Petronas), for an undisclosed sum.

GMR Energy is building an 800 megawatts (MW) power plant on Jurong Island, Singapore. Fuelled by regassified LNG, it is scheduled to start commercial operations in 2013.

GMR Supply Singapore Pte Ltd, a wholly owned subsidiary of GMR Energy, that holds an electricity retail licence in Singapore, will manage the electricity retail business.

Shares of GMR Infrastructure Ltd fell 5.11% to 26.9 on the Bombay Stock Exchange, while the benchmark Sensex shed 0.69% to close at 16,051.1 points. The announcement was made after market hours.

Petronas is one of the largest energy conglomerates in Southeast Asia.

GMR group’s chief financial officer Subba Rao Amarthaluru said this deal, subject to approval by lenders, opens up a new avenue for strategic relationship between the two groups. “But more than that this deal allows us to de-risk the project and infuse cash," Amarthaluru added.

Anuar Ahmad, executive vice-president, gas and power business of Petronas said in a statement that the acquisition marks Petronas group’s entry into the global power market, and is a major step in its effort to extend its existing integrated presence further along the energy value chain.

An 8 September note by local brokerage Emkay Global Financial Services Ltd said GMR Infrastructure is expanding rapidly in energy, with installed capacity set to rise from 823MW to 3,600MW by financial year 2013.

In July, GMR Energy got a financial package of $670 million term loan facility and $270 million credit and working capital facility with a tenor of 17 years from a group of banks led by Standard Chartered Bank for Jurong Island project.