Suzlon acquires 7.7% of REpower; raises bid to €150 per share

Indian wind power major Suzlon Energy has revised its offer price for REpower Systems of Germany to €150 per share, with an acquisition of 7.7% stake in the German firm. Suzlon has purchased 627,000 shares of REpower Systems through it two step-down, wholly-owned subsidiaries, SE Drive Technik GmbH and Suzlon Windenergie GmbH. With this acquisition, the company has revised the offer price of the voluntary public tender offer to €150 from the €126 for acquiring up to 100% share of REpower. Suzlon has teamed up with Martifer, a unit of Portugal’s largest builder, Mota-Engil, to launch a bid for REpower. Martifer owns more than 25% of REpower.

Earlier in March, French nuclear power firm Areva offered €140 per share for REpower, raising its previous offer of €105 by a third, to top Suzlon’s bid of €126 per share.

Read The Economic Times article.
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Suzlon Energy bids $1.3 bn for German company REpower
Areva ups bid price for REpower to €140 / share; Suzlon mulling counter-bidding options

Moser Baer Photo Voltaic picks up 40% stake in Slovenia solar company Solarvalue for $10 mn; Warburg Pincus ups stake in Moser Baer

Moser Baer India, through group company Moser Baer Photo Voltaic has acquired 40% stake in Slovenia-based Solarvalue Proizvodnja. Moser Baer would acquire the stake from Germany-based Solarvalue AG, which currently holds 100% stake in the Slovenian company. Solarvalue Proizvodnja is involved in solar silicon production. The total value of investment stands at $10 mn, of which $6 mn is the initial commitment and the balance investment, is based on certain milestones.

Moser Baer Photo Voltaic is in the process of setting up a photo voltaic cell and module manufacturing project with an 80 MW capacity in India’s first renewable energy SEZ at Greater Noida. It has already concluded trials for 40 MW capacity and hopes to commission another 40 MW by the second half of next fiscal. Solarvalue plans to set up a capacity of over 4000 tonnes of solar grade silicon by end of 2008. With the acquisition Moser Baer Photo Voltaic now has a supply agreement for 40% of the output of the solar grid poly-silicon project.

Read more in The Economic Times article.

In a related development, affiliates of private equity investor Warburg Pincus have hiked their stake in Moser Baer to 33.75% through conversion of 47,500 Global Depository Receipts (GDRs). Woodgreen Investment, Bloom Investments, Ealing Investments, Randall Investments and Elm International – all affiliates of Warburg Pincus – have acquired an additional 4.26% stake in Moser Baer. Each GDR represented 100 underlying equity shares, leading to 4.75 mn equity shares. From around 329 mn shares representing 29.49% stake earlier, Warburg Pincus affiliates now holds approximately 376 mn shares.

More in The Economic Times article.

Tata Power to acquire 30% stake in Indonesian coal firm Bumi resources for $1.3 bn

Tata Power will pay $1.3 bn to buy stakes in Indonesian PT Bumi Resources Tbk’s two coal mines. Tata Power will acquire 30% stakes in Bumi’s PT Kaltim Prima Coal and PT Arutmin Indonesia, two of Indonesia’s largest coal mines, and a related trading company. The two coal mines produced 53.5 mn tonnes of coal per year in 2006.

Tata Power will also buy 10 mn tonnes of coal from Kaltim Prima Coal for two proposed power projects with a capacity to generate a total of 7000 MW. The plants will be built on the west coast of India over the next five years.

Tata Power generates 2300 MW of power in the country and has been eyeing coal reserves in Australia, Indonesia and South Africa to tie up supplies for its proposed 15,000 MW-capacity expansion plan. Tata Power needs about 21 mn tonnes of imported coal. The company expects that 50% of the demand will be addressed through this deal.

Tata Power has three months to complete the transaction.

Read more in The Economic Times article.
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REL, Tata Power looking at Indonesian coal company Bumi
Tata Power to bid $1.6 bn for Indonesian coal mine Bumi Resources

Areva ups bid price for REpower to €140 / share; Suzlon mulling counter-bidding options

It seems to be the seasons for biddings and counter-biddings. French energy major Areva has upped the price for acquiring Germany’s third-largest wind power company, REpower Systems AG, by putting in a counter-bid of €140 per share. Areva had earlier made an offer to buy stake in REpower at €105 per share, and its revised offer is 33.3% higher than the first bid. The new figure is 11.1% higher than the Suzlon Energy-Martifer’s offer of €126 per share. Suzlon had recently received the approval of German regulator for its bid for REpower Systems. It had offered €1.2 bn ($1.33 bn) to acquire REpower Systems.

Read the Business Standard article.
Related Post:
Suzlon Energy bids $1.3 bn for German company REpower

It is learnt that Suzlon Energy is likely to revise its offer to buy out REpower. The company is in talks with a consortium of banks led by ABN-AMRO and may come out with a revised offer of close to €160 per share, which will raise the value of REpower to $1.7 bn. Areva’s revised offer has raised the value of REpower to $1.5 bn.

REpower, Germany’s third-largest maker of wind-power equipment behind Vestas Wind Systems and Enercon, reported a profit of €7.1 mn in 2006. In Germany, REpower has a 10% market share.

Tata Power to bid $1.6 bn for Indonesian coal mine Bumi Resources

Tata Power is preparing to bid around $1.6 bn for a 30% stake in Indonesian coal company Bumi Resources in an effort to counter-bid Japanese company Mitsubishi’s offer of $1.32 bn. Mitsubishi has made the highest bid so far.

Tata Power has been asked to submit a binding bid by February-end. Mumbai-based Tata Power major may also look at hiking the bid, if found necessary.

Bumi had put a reserve price at $1 bn. Five bidders were short listed including the Anil Ambani-owned Reliance Energy and Kepco, a power major from South Korea.

Tata Power’s bid will put the valuation of Bumi resources at $5.2 bn. Tata Power has won the 4000 MW Mundra Ultra-Mega Power Project and has been actively scouting for imported coal at cheaper rates. It would need to import around 12 mn tonnes of coal annually starting 2012 for the project.

Read The Economic Times article.
Related Post: REL, Tata Power looking at Indonesian coal company Bumi

Lanco Infrastructure and Jindal Steel & Power buy Globeleq Singapore

Lanco Infrastructure and Jindal Steel & Power Limited (JSPL) have acquired Globeleq’s Indian assets by acquiring Globeleq Singapore. Lanco and JSPL will now implement the Rs. 16,000 crore-Ultra Mega Power Project (UMPP) in Sasan. Lanco and JSPL have purchased 60% and 40% shareholding, respectively, in the Singapore-based subsidiary of the investment arm of Department for International Development, the development agency of the British government. The consideration for the buyout has not been disclosed; Lanco management says that it is nominal.

Lanco has roped in Jindal Steel to address the concerns of the government over the successful completion of the project in the light of Globeleq’s exit from the consortium. Around two months ago, the Lanco-Globeleq consortium had emerged as the winning bidder of the Sasan project. Lanco had 30% stake, while Globeleq had 70% stake in the consortium. With the acquisition of Globeleq’s stake, Lanco will have 72% interest, direct and indirect, over the Sasan project while JSPL will have 28% stake. JSPL reserves the right to scale up its holding to 49% in the project in five years. The shareholders will chip in Rs. 3200 crores as equity contribution towards the project while the remaining Rs. 16,000 crores will be generated through debts. Lanco may also look at other assets of Globeleq which have been put up for sale.

Read the Business Standard article.
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Tata Power, Kalpataru, Lanco to join Reliance Energy in bidding for Globeleq’s assets

Suzlon Energy bids $1.3 bn for German company REpower

Suzlon Energy, India’s largest wind power company is in talks to acquire Germany’s REpower. Suzlon has made a public bid of €126 per share for REpower, in a counter-bid to Paris-based nuclear major Areva’s bid of €105 per share. Suzlon’s bid values the deal size at about $1.3 bn.

The bidding process is likely to continue for 4-6 weeks. Suzlon would fund the acquisition through a mix of debt and internal accruals. Areva is the No. 1 maker of nuclear reactors and has offered €105 per share for 70% of the German company. Suzlon’s bid is being made in partnership with Martifer, a unit of Portugal-based Mota-Engil SGPS. Martifer owns a quarter of REpower.

REpower is Germany’s third-largest maker of wind-power equipment after Vestas Wind Systems and Enercon. It reported a 9-month profit of €1 mn compared to a year-earlier loss of €8.3 mn. Martifer has a joint venture with REpower in Portugal. Suzlon and Martifer have signed a legally binding agreement, which sets out the terms for this offer. The offer will be made through BidCo, in which Suzlon holds 75% and Martifer 25% of the capital. Suzlon will finance the offer and Martifer will support it. Suzlon will seek the support of the REpower management along with Martifer for the offer and has claimed a strong interest in working with REpower’s existing management in the future.

Suzlon would retain Hamburg as the headquarters of REpower, and would create 100-200 highly qualified R&D jobs in Germany. REpower has operations in France and elsewhere in Europe, and is planning expansions in China, India and North America. Suzlon Energy is the market leader in Asia and the world’s fifth largest wind turbine manufacturer by annual installations. It is currently on a mega-expansion drive in the international market. It bought Belgium-based Hansen for $565 mn in March 2006. Suzlon is being advised on the acquisition by Yes Bank and ABN-AMRO.

Read the Business Standard and The Economic Times articles.

Tata Power, Kalpataru, Lanco to join Reliance Energy in bidding for Globeleq’s assets

Tata Power, Kalpataru, Lanco Infratech are some of the companies that have joined the race for British power major Globeleq’s assets. The Anil Ambani Group has already shown interest in Globeleq’s generating assets of 4500 MW in Asia and Africa valued at $2 bn (See Related Post). Lanco Infratech is Globeleq’s partner in the Sasan ultra-mega power project. Globeleq is searching for a buyer for its 70% stake in Sasan. Kalpataru, the Mumbai-based real estate and power transmission group, has a strong presence in North Africa with its transmission business and is said to be also in the race for the African assets.

Read the Business Standard article.

Reliance Energy to bid for Globeleq’s global assets

Domestic power major Reliance Energy will bid for the global assets of operating power company Globeleq in the four blocks of Asia, Africa, the Americas and Egypt. Globeleq recently partnered Lanco Infratech to win India’s first ultra-mega power project at Sasan in Madhya Pradesh. Globeleq’s operations, valued at $2 bn, span over 13 countries and accounts for about 5000 MW in 13 power companies. Globeleq’s stake, most of which is in gas-based power plants, totals to about 3000 MW. Lehman Brothers has been mandated to carry out the transactions. Reliance Energy, which is planning to develop several power projects in India including the gas based power project in Dadri, has set its eyes on these assets and is expected to put in an indicative bid by mid-February.

Globeleq was set up by the UK Government’s Department for International Development (DFID) as part of its strategy of promoting the private sector in the developing world. DFID launched Globeleq in 2002 as the power sector arm of its own CDC Group. In January 2004, it separated Globeleq as a stand-alone concern to run CDC’s power portfolio. CDC, Globeleq’s sole shareholder, has $3 billion in net assets and its investment is managed by Actis, the private equity fund manager specializing in emerging markets.

Read more in the article in The Economic Times.

REL, Tata Power looking at Indonesian coal company Bumi

The Economic Times reports that power sector majors Reliance Energy and Tata Power are looking at buying an equity stake in Bumi Resources, an Indonesian coal firm, to meet the fuel requirements for their power plants in India. International companies such as Mitsubishi Corporation, South Korean power company Kepco and a Glencore subsidiary have also shown interest in Bumi. Bumi Resources is Indonesia’s largest coal producer and exporter with reserves of 52 mn tonnes, and has put a reserve price of $1 bn for around 30% stake. Acquiring coal mines would help the companies in assuring fuel supplies. Also, Indonesian coal has lower ash content and higher calorific value than Indian coal, resulting in higher power generation with less fuel.

IL&FS to float $1 bn PE fund with Abu Dhabi Investment Company

IL&FS and Abu Dhabi Investment Company (ADIC) have joined hands to float a $1 bn private equity fund to invest in infrastructure projects in West Asia and North Africa. Both the companies are expected to commit around $50 million to the joint venture. The fund would look for investment opportunities in the upstream energy sector, in addition to roads, power and water supply management projects. ADIC would also consider investing in the Indian downstream sectors such as power.

Read more in the Business Standard article.

REC to raise $200 mn in ECBs; StanChart gets mandate

The Rural Electrification Corporation (REC) is planning to raise up to $200 mn of yen-denominated loans from the Japanese market in external commercial borrowings (ECBs).
Standard Chartered Bank has been given the mandate for syndicating the loans.

This is the first time that REC will raise funds through the ECB route. REC had earlier raised funds from multilateral funding agencies like Japan Bank for International Co-operation (JBIC) and Germany’s KfW Bankengruppe. But this is the first time that the mini-ratna will borrow directly from the overseas market on commercial terms. The Reserve Bank of India (RBI) has recently cleared the corporation’s overseas borrowing plans.

The funds would be raised at 47 basis points (bps) above the yen-linked six-month LIBOR currently at around 0.60%. The total cost of borrowing including the administrative cost of raising the loan will be around 61 bps over yen-LIBOR. Funds raised through ECB will be used for REC’s core activity to finance and promote rural electrification projects across the country. REC also provides financial assistance to state electricity boards and state government departments.

Read the complete article in The Economic Times.

IFC to invest $300 mn in Indian ultra-mega projects; in talks with Tata Power

World Bank private equity arm, the International Finance Corporation (IFC), is in talks with Tata Power for providing long-term debt funding, along with other major ultra-mega power projects. Funding would be in the range of $200-300 mn. IFC is also looking at other infrastructure projects, especially in the road sector.

IFC is also looking at picking up equity stake and upper Tier-II instruments in the banking sector. It has recently invested $150 mn in ICICI Bank’s upper Tier-II bonds and $100 mn in HDFC Bank’s similar issue, and is open to more such investments in banks which will help them meet their capital requirements.

IFC already has a big-ticket exposure of over $100 mn in Tata Steel and Cairn Energy. It also has an RBI approval for raising $1 bn-equivalent of rupee funds. IFC has the fourth-largest exposure to India after Russia, Brazil and Turkey.

Read the article in The Economic Times.

India Power Fund to be operationalized by March 2007

India Power Fund, a venture capital fund of Power Finance Corporation, catering to the need of India’s growing power needs will be operationalized by the end of the current financial year. The fund has been in the pipeline since February 2004 when it was announced by the NDA government to meet the shortfall in equity needs for the power sector.

The Indian power sector needs an investment of more than $100 bn to add 68,000 MW of additional generation capacity, besides transmission and distribution network by 2012. Life Insurance Corporation (LIC) is already participating as one of the partners contributing to the fund. The power ministry has sought an income-tax exemption of 20% of the total contribution for five years to the fund as it feels tax break will help mop up resources.

Read The Economic Times for more details.

Petroleos De Venezuela may buy big stake in MRPL refinery

Venezuela’s state-run oil company Petroleos De Venezuela SA (PDVSA) is looking to acquire a major equity stake in MRPL’s existing refinery as well as the 15 mmtpa refinery proposed to be set up in the Mangalore SEZ. Additionally, the company is seeking to pick up stakes in the discovered and producing assets of ONGC in India and abroad.

In MRPL, ONGC holds a majority stake of 71.62%, while HPCL holds 16.97% and is seeking to enhance its stake in MRPL to over 26%. Besides monetary considerations and offering them equity in their rich oil fields in Venezuela, PDVSA may enter into crude supply and product off-take arrangements with ONGC. PDVSA’s business development unit Corporacion Venezulana de Petroleo (Venezuelan Petroleum Corporation) will be negotiating the stake deal with the Indian government and ONGC.

PDVSA is also in negotiations with OVL, the overseas arm of ONGC, to offer a 30% stake in the San Cristobal block. The company is in the process of procuring certification for the reserves in the block, which may take another 18 months. Preliminary estimates of the in-place reserves are 1.3 trn barrels of oil. The oil found is heavy and only 20%, or 235 bn barrels, is recoverable.

Read The Economic Times article.

HPCL to sell 50% stake in Vizag refinery to French oil firm Total

Hindustan Petroleum Corporation Limited (HPCL) is selling 50% stake in its Vizag refinery to French oil major Total SA. Total may pick up the stake in collaboration with Kuwait Petroleum for a consideration of Rs. 6000 crores.

HPCL is setting up a 9 mn tonne export-oriented refinery adjacent to the existing refinery at Vizag at an estimated investment of Rs. 12,000 crores. The refinery would be completed in 2011. HPCL is also planning a 1 mmtpa petrochemical chemicals plant at the refinery site.

The company may also look to raise funds through an initial public offering of the Vizag refinery. In a related development, the Lakshmi Mittal Group has reportedly shown interest for a 49% stake in HPCL’s 9 mmtpa Bhatinda refinery in Punjab.

Read the article in Business Standard.

Qatar’s RasGas to acquire 10% in Petronet LNG; stake valued at Rs. 460 crores

RasGas from Qatar may buy around 10%s equity stake in Petronet LNG (PLL) for a consideration of around Rs. 460 crores. PSU oil majors ONGC, BPCL, GAIL and IOC each having a 12.5 % stake in the company will divest 2.5% each to RasGas. RasGas is doing the due diligence.

RasGas is the first supplier of LNG to India and currently supplies 7.5 mn tonnes a year to Petronet’s LNG terminal at Dahej in Gujarat. RasGas and Petronet are in a 25-year sale and purchase agreement for LNG supplies. After diluting 10% stake to RasGas, BPCL, IOC, GAIL, ONGC and Gas de France will have stakes of 10% each in PLL. ADB will retain its 5.2% stake, while the remaining 34.8% lies with the Indian public.

The company requires Rs. 1700 crores for the expansion of Dahej LNG terminal from 5 mmtpa to 12 mmtpa. The company has tied up for a debt of $300 mn ($100 mn through FCCBs) and the balance would be funded by internal accruals. The company also envisages building the Kochi terminal at a cost of Rs. 2500 crores by 2010. The company has also allocated Rs. 300 crores for vessels, Rs. 460 crores for new jetty and Rs. 150 crores for solid cargo port.

Read the article in The Economic Times.

Power Finance Corporation IPO to begin on Jan 31; other government power companies to follow soon

The UPA Government has started diluting the centre’s stake in major state-owned power companies without resorting to divestment. The Power Finance Corporation (PFC) will offer a 10% additional equity through an Initial Public Offer (IPO) that will open on January 31. The offer would close on February 6. Post offer, the government’s equity in the company will be reduced to 89.78%. The PFC hopes to mobilize Rs. 1000 crores through the first public offer of its 11.73 crore shares through a 100% book building process. The company has fixed a price band of Rs. 73 – 85 per share. Book value has been estimated to be Rs. 67 per share. Enam Financial, ICICI Securities and Kotak Mahindra Capital have been retained as the book running lead managers for the issue.

With the PFC IPO opening shortly, the Government’s move to mobilize funds for power sector has begun. In the next three months, the centre proposes to dilute its stake in three other major power companies by 10% each. The other companies that are in the process of lining up public offers include Power Grid Corporation of India Ltd (PGCIL), National Hydroelectric Power Corporation (NHPC) and North Eastern Electric Power Company (NEEPCO).

Read the article in The Economic Times.

Reliance India Power Fund buys 15% in KRYFS Power Component

Reliance India Power Fund has acquired a 15% stake in KRYFS Power Component for an undisclosed sum. Reliance India Power Fund is a 50:50 JV between the Reliance-ADAG financial services subsidiary Reliance Capital and Singapore-based private equity firm Temasek Holdings. The corpus of the fund is $200 mn and has been set up to invest in Indian power ancillary companies. Su-Kam Power Systems, EMI Transmission, and Ravin Cables are some of its investee companies.

The fund invested Rs. 45 crores in Delhi-based Su-Kam Power Systems for a 20% stake and Rs. 50 crores in Mumbai-based EMI Transmission, an unlisted power equipment company, for a 23% stake.

KRYFS Power Component is a Rs. 300-crore manufacturer of transformer cores and patented sling-set twin path slings. It will utilize the funds for capacity expansion and diversifying into newer businesses through organic and inorganic means. The company manufactures high-tenacity fiber slings in collaboration with Slingmax, Inc. of USA and currently has a capacity to produce nearly 12,000 mt of transformer cores, wound cores and built up cores.

Read The Economic Times article for more details.

Shinsei Bank to set up mutual fund business in India

Another Japanese firm is planning to enter the asset management business in India. Shinsei Bank is reportedly forming an asset management JV with the South-based Andhra Bank. This is the second such announcement by a Japanese financial services company – earlier Nikko AMC had announced a similar kind of JV with the Ambit group. Shinsei will have a majority stake in the business. Shinsei had previouslyannounced a tie-up with UTI MF to invest $300 mn, raised from Japanese investors, in the Indian stock markets. Of late, many foreign funds such as Japan’s Mitsui, Korea’s Mirae, UBS, Aviva, Pioneer, etc. are planning to enter the Indian mutual fund space.

Read Business Standard for more details.

Cairn India fixes issue price at Rs. 160

Cairn India, a crude oil and natural gas exploration and production company, has fixed its issue price at Rs. 160 per share. The low pricing is due to uncertainty in market conditions, and consequent weak response from investors. The company will now have to return nearly Rs. 335 crore to private equity investors, (PE) for pre-IPO placement done at Rs. 176 per share. The issue was oversubscribed just 1.14 times with QIBs portion subscribed 1.36 times, HNI 0.47 times and Retail 0.9 times. The company entered the capital markets with a public issue of 328 mn equity shares of Rs. 10 for cash at a premium to be decided through a 100% book-building process. DSP Merrill Lynch, ABN-AMRO Securities and JM Morgan Stanley were the book running lead managers.

Read Moneycontrol.com for more details.