GMR Energy, part of GMR Infrastructure, has acquired Emco Energy, the power generating arm of transformer maker Emco, for an undisclosed sum. Although Emco Energy didn’t elaborate on the reasons for the sale, it is learnt that a large gap in the equity funding of its 600 MW thermal power project being set up at Warora in Maharashtra with an investment of Rs 2,400 crore has initiated the transaction.
Emco Energy had earlier been projected as Emco first major foray into power generation that would have diversified the Mumbaibased transformer maker’s operations. When contacted, Emco chairman Rajesh Jain said that the move was basically to ”unlock value so that we can continue with our plan to build more power projects.”
For GMR, the move is more strategic as the group doesn’t have a presence in industry-rich Maharashtra. “This is a business that we understand and when we had the opportunity, we went for it,” GMR Energy CEO Raaj Kumar said. “It’s a significant capacity and is a fast track unit. We are confident that we will build the project in 30 months.” GMR Infrastructure, as part of its business strategy in energy, had acquired a 50% stake in InterGen in 2008, a leading global power generation company based in the Netherlands.
It was earlier planned that Emco Energy would bring in Rs 500 crore towards its equity contribution to the power project while the rest would be raised through debt. Work on the Warora project, which envisaged to built the plant in two phases of 300 MW each, had been initiated and the plant is at the stage for order placement.
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