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Videocon to sell 25% in power arm to PE firms

25 Nov 2009

Videocon Industries Ltd is in talks with private equity players to place 25% stake in its power arm and hopes to conclude the deal by April. The company is developing power projects through special purpose vehicle Pipavav Energy Ltd, which is now renamed as Videocon Power Ltd.


Consumer durables major Videocon, which has diversified into fields such as oil & gas and power, is setting up a thermal power plant of capacity of 1,200 mw in Gujarat. The total investment is 6,000 crore in the Gujarat project. It has already tied up 80% of the debt component with IDBI, State Bank of India and Rural Electrification Corp.


The project is likely to achieve financial closure in one month, and would be completed in 42 months. Besides the Gujarat project, the company is also setting up power projects in West Bengal and Chhattisgarh of 1,200 mw capacity each.


The total investment on the three projects would be 18,000 crore that will be funded in the debt-to-equity ratio of 75:25. The company hopes to complete the Chhattisgarh project in four years and the West Bengal project in five years.

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