Tata Power has sold its entire 50 per cent stake in Cennergi, a South African joint venture, for $106 million.
Cennergi Ltd is a 50:50 joint venture between Exxaro Resources Ltd. and Khopoli Investments Ltd., a wholly owned subsidiary of The Tata Power Company Ltd. Exxaro is a leading South African coal producer. Post this transaction, Exxaro will have 100 per cent ownership of Cennergi, Tata Power said in a filing to the exchanges.
"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 & Managing Director, Tata Power. "The proceeds from such sale would be re-invested in emerging areas where there is a huge growth opportunity. 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 added.
The agreement is likely to be completed by Q3FY20. Cennergi owns two wind farms in South Africa - Amakhala Emoyeni (with a generation capacity of 134.4 MW and 95 per cent shareholding) and Tsitsikamma Community Wind Farm (with a generation capacity of 95.3 MW and 75 per cent shareholding). Each project has a 20-year Power Purchase Agreement (PPA) with the State power utility Eskom. ABSA Bank was the sole advisor to Khopoli for the transaction.
BL had earlier reported that Tata Power was looking to scale down its international business by selling off its non-core assets as it looks to double down in India.
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