Blackstone Group to invest Rs500 crore in Visa Power
26 July 2011
Private equity giant Blackstone Group has agreed to invest about Rs500 crore ($111 million) in Kolkata-based Visa Group's power business.
Blackstone will hold around 25.2 per cent stake in Visa Power, an independent power producer whose core asset is a 1,200 MW coal-fired plant in Chhattisgarh, The Times of India, reported, quoting sources.
Blackstone and Visa Power have been in discussions for more than a year, but a definite deal was signed on Monday. A formal announcement is expected later this week. JM Financial was sole advisor to the transaction.
This is Blackstone's third investment in India's power generation sector, the others being in Moser Baer Projects and Monnet Power Company, with the committing almost $500 million in the last 15 months.
Visa Group is a $1.1-billion diversified conglomerate with interests in metals, minerals, energy, commodity trading and shipping.
Vishambhar Saran, a former Tata Steel executive, founded the group in the mid-90s when he forayed into mining. Besides the Chhattisgarh plant, Visa Power has a pipeline of further 6,600 MW under development, including a 1,320-MW coal-based super critical power plant in Orissa.
Visa Power also proposes to set up projects in Gujarat, Madhya Pradesh and Jharkhand. Blackstone's $111 million investment will be utilised for construction and development of its Chhattisgarh project.
Visa Power's strategy is to be a low-cost generator by ensuring proximity to its fuel sources. Visa Power's core Chhattisgarh project has been allocated part of a captive coal mine from which it will source the vast majority of its coal requirement, enabling the plant to have a very competitive cost of generation.