India: NTPC to buy hydropower firms THDC & Neepco for $1.64b

visual from NTPC site

India’s largest power generation utility—NTPC Ltd—-on Thursday announced the Rs11,500 crore acquisition of hydropower firms THDC India Ltd and North Eastern Electric Power Corporation Ltd. (Neepco), as part of one of the government’s largest asset-sale exercises.

The asset sales comes amid a sharp deceleration in Asia’s third-largest economy in the backdrop of the coronavirus outbreak and declining tax collections.

In an announcement to the stock exchanges, the state run utility said that it has inked sales purchase agreements (SPA) for acquiring 74.496% in THDC for Rs7,500 crore and a100% acquisition of Neepco for Rs4,000 crore respectively.

The sale of these public sector units along with there management control is part of a consolidation exercise of the state run hydropower firms, that also holds the key to government meeting its pared disinvestment target for 2019-20 of Rs65,000 crore. It has garnered Rs32,964 crore from asset sales in the current fiscal year.

In 2014, a concept paper on the possibility of a merger of all state-owned hydroelectric companies recommended a phased approach, starting with North Eastern Electric Power Corp Ltd (Neepco) to be combined with NHPC Ltd, followed by THDC India Ltd and SJVN Ltd.

In November, the government had cleared a plan to reduce its stake in certain state-run enterprises to under 51% on a case-to-case basis.

As on 31 March 2018, there were 339 central public sector enterprises with a total paid-up capital of Rs2.5 trillion, and reserves and surpluses of Rs9.42 trillion.

As part of the National Democratic Alliance (NDA) government’s focus on streamlining operations across public sector units (PSUs), state-run firms’ consolidation will continue, finance minister Nirmala Sitharaman had said in her budget speech.

State-run Oil and Natural Gas Corp. (ONGC), which accounts for 73% of India’s oil and gas output, acquired the government’s stake in HPCL for Rs36,915 crore in 2018. In March last year, Power Finance Corp Ltd (PFC) also completed the purchase of a controlling stake in state-run peer REC Ltd to create an $80-billion lending giant by assets. PFC paid Rs14,500 crore to the Union government to buy a 52.63% stake in REC.

This article was first published on livemint.com.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.