Tata Power to exit South African joint venture Cennergi for Rs 772 crore
The JV, entered into through Tata Power’s wholly-owned subsidiary Khopoli Investments with Exxaro Resources, was a 50:50 operation formed in 2012.
NEW DELHI: In the midst of a deleveraging process, with strategic focus shifting to the domestic market, Tata Power on Tuesday said that it would exit its South African joint venture (JV) Cennergi for $106 million (around Rs 772 crore).
The JV, entered into through Tata Power’s wholly-owned subsidiary Khopoli Investments with Exxaro Resources, was a 50:50 operation formed in 2012. The JV Cennergi was primarily focused on projects in South Africa, Botswana and Namibia.
“Under the agreement, Exxaro will acquire the entire 50 per cent shareholding of Khopoli Investments. The agreement is likely to be completed by the third quarter of this fiscal. Post this transaction, Exxaro will have 100 per cent ownership of Cennergi,” said Tata Power.
Cennergi currently owns two wind farms in South Africa — Amakhala Emoyeni, with a capacity of 134.4 MW and 95 per cent shareholding, and the 95.3 MW Tsitsikamma Community with a 75 per cent shareholding. Each project has a 20-year power purchase agreement with the state power utility Eskom.
“The decision to monetise this South African asset is in alignment with our stated strategy to deleverage the balance sheet by divesting sub-optimal size international assets,” said Praveer Sinha, CEO and managing director, Tata Power.
He went on to add that the proceeds from the sale would be re-invested in emerging areas.
“The company will focus on renewable power, power distribution and service-led businesses in India which will bring in greater value and help us align with the emerging consumer needs,” he further said.
Source: newindianexpress
