RInfra to offload pie in Mumbai power biz

Anil Ambani-owned Reliance Infrastructure (RInfra) has signed a non-binding term sheet with the Canada’s Public Sector Pension Investment Board (PSP Investments) to sell a 49 per cent stake in its Mumbai power business.

The specified business is to be carved out on a going concern basis into a separate Special goal Vehicle, in which Reliance Infrastructure will own the controlling 51 percent stake and PSP Investments will own the rest 49 percent, the company said in a statement.

RInfra will utilise proceeds of stake sale to reduce debt. Sources said of the Rs 16,000 crore debt that R-Infra now has on its books, Rs 8,000 crore will be moved to Reliance Energy’s books. This values the deal at Rs 1,263.32 crore. The total number of shares traded during the day was 663997 in over 12434 trades. In 2003, R-Infra had bought over the erstwhile BSES Ltd, which managed the power generation, transmission and distribution businesses in Mumbai suburbs and merged it with itself. The company is also in the process of selling its cement and roads business. Earlier, the company had lost electricity customers in Mumbai to Tata Power after disputes in billing. Edelweiss says, “The listed entity will now be left with the engineering procurement construction (EPC) business, the Mumbai metro and Delhi distribution businesses, all which have limited growth visibility”.

Two of Canada’s largest pension funds-Caisse de depot et placement du Quebec (CDPQ) and PSPIB-are looking to invest in the Indian infrastructure sector and have started scouting for assets, Mint reported in October, citing two people familiar with the discussions who remained unnamed. The cost of the park would be Rs 6,500 crore.

Shares of Pipavav Defence and Offshore Engineering Company are trading at Rs 63.15, up Rs 3.25, or 5.43% at the Bombay Stock Exchange (BSE) on Tuesday at 11:35 a.m.

In June, the Reliance Group applied to the Department of Industrial Policy and Promotion (DIPP) for licences to manufacture scientific investigation ships, parts and accessories of aircraft and spacecraft, engines, turbines and radar equipment, among other things.