GMR Infrastructure sealed the deal to sell its 50% stake in InterGen to Chinese electricity company Huaneng Power for $1.23 billion. The transaction is expected to close in the first half of 2011. The decision to divest 50% stake in InterGen is in line with its strategy to focus more on the Indian market.
China Huaneng has paid $1.2 billion for the stake, which is $100 million above the price paid by GMR when it bought the stake from an AIG unit in 2008. InterGen was a leveraged buyout for GMR and has fetched mere 10% return on an acquisition cost of $1,135 million.
Since early this year, the company has been evaluating several proposals from buyers for InterGen's stake most of which are said to be unsolicited. It has also been indicating that the stake sale would happen only if the buyers come up with a proposal to offer anything in the range of $1.3 to $1.4 billion.crackcrack
