India's GMR denies talks to sell off Singapore power plant

GMR will exit its first IPP outside India by selling the entire 70% stake in its Singapore plant.

With GMR expecting to raise over $650 million through the sale of what is popularly known as the Island Power Project, a 800-mw combined cycle gas turbine power plant located at Singapore's Jurong Island.

It was built at an estimated cost of $1 billion with a 57:43 debt-equity ratio - is in its final stages of completion, and is likely to begin commercial operations by December this year.

The move will generate liquidity and help pare its consolidated group net debt of Rs 37,681 crore as of December 2012, which amounts to a gearing of 3.5 times.

The Bangalore-headquartered group is currently in advanced negotiations with a group of strategic Southeast Asian power and utility majors, and is hoping to conclude a deal in the next few months, said multiple sources aware of the development.

It has also been in active discussions with Singaporean companies such as Keppel Energy - a part of the diversified Keppel Corporation - and Sembcorp Industries - a leading energy, water and marine group operating across six continents -for the Jurong Island plant, said one of the sources mentioned above. A Hong Kong-based private equity fund is also believed to have been approached. 

"The potential buyer will be a strategic player from South-East Asia. GMR has been selectively reaching out to them," said an official on condition of anonymity as the talks are still private.

GMR denied any plans to sell. "We deny any such stake sale in the 800-mw GMR Energy Singapore Pte Ltd," said a company spokesperson.

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