Malaysia’s YTL in talks to acquire stake in India-based NSL’s thermal power units

11 September 2014 (Last Updated September 11th, 2014 18:30)

YTL Corporation, a Malaysian infrastructure group, is holding negotiations with India-based NSL Group to acquire up to 49% equity in NSL's thermal power business.

YTL Corporation, a Malaysian infrastructure group, is holding negotiations with India-based NSL Group to acquire up to 49% equity in NSL's thermal power business.

YTL plans to acquire stakes in NSL Orissa Power and Infratech, with talks said to be in an advanced stage, reported The Economic Times, citing an unnamed official.

"The deal could be entered at little over par of investments brought in by NSL promoters and YTL may pay premium payments over the next few years based on milestones."

YTL, which owns power assets in Malaysia, Indonesia, Singapore, Australia, and the UK, has posted revenues of $6.1bn for the year-ended June this year.

The publication quoted NSL Group chairman Mandava Prabhakar Rao as saying: "The deal could be entered at little over par of investments brought in by NSL promoters and YTL may pay premium payments over the next few years based on milestones."

While the Indian company's chairman revealed that it plans to sell a 49% stake in the power units to raise funds, but he did not reveal any further details.

Rao added: "We are discussing with potential strategic partners."

This latest development comes against the backdrop of the recent Indian Supreme Court's verdict, which called the award of around 200 coal blocks as illegal.

Despite this ruling, worldwide investors seem to not be detered in to acquiring power assets in India.

On Tuesday, the apex court reserved its verdict on the cancellation of the award of coal blocks.

However, if a final decision is in favor of cancellation, several Indian firms could be badly hit as they have made huge investments in power and steel plants, which are banking on these blocks.

NSL Orissa Power is establishing a 1,320 MW coal-fired power project in the Angul district of Orissa with an investment of INR80bn ($1.31bn).

"NSL Orissa Power is establishing a 1,320 MW coal-fired power project in the Angul district of Orissa with an investment of INR80bn ($1.31bn)."

The firm is raising the funds for this project through debt equity of 70:30.

The company has received all the necessary clearances and awarded the engineering, procurement and construction (EPC) contract to Tata Projects, while Alstom has received the contract for the delivery of the equipment.

The unidentified official also said YTL is also in talks with NSL group to buy a majority stake in the operations and maintenance arm of the Orissa project.

With an operating renewable energy portfolio of 185MW, NSL Group is implementing another 1,000MW of renewable energy projects.

Several investors have already invested more than $60m in these projects.

Energy