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Huaneng buys GMR stake in Intergen for $1.2 bn

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Reports say it may acquire remaining stake in the Dutch firm

Chinese electricity company has sealed a deal to buy 50 per cent stake in , which is owned by the . According to media reports, the company has paid $1.2 billion for the stake, which is $100 million above the price paid by GMR when it bought the stake from an AIG unit in 2008.

International media reports say Huaneng is also planning to buy the other 50 per cent stake in the Dutch company Intergen, owned by Ontario Teachers’ Pension Plan based in Canada. Huaneng and GMR did not respond to an e-mailed query sent to them on the development. The company might issue a statement next week.

Huaneng is known for its acquisition strategy. It had earlier pipped GMR in the purchase of Singapore power utility by paying $3 billion. The Chinese government-owned power company has an installed capacity of around 40,000 Mw and is listed on the .

Other than Huaneng, the stake sale of Intergen had two other bidders, ie Tata Power and a consortium of private equity funds, whose bids were much lower than that offered by Huaneng.

GMR had outbid four contestants in 2008 to buy the Intergen stake. Intergen has a total generation capacity of 8,088 Mw and has its power capacity spread across various countries like the UK, the Netherlands, Mexico, Australia and the Philippines. It plans to expand its capacity by another 4,000 Mw.

GMR had borrowed $837 million to fund the acquisition. A few months back, the company re-financed as much as $737 million of this short-term loan which were converted to long-term debt, to be paid after five years. It is also known to have converted $100 million in debt into equity.

The Bangalore-based infrastructure major had been trying to offload stake in the company in order to de-leverage the balance sheet. A top official from the company earlier said they are shifting focus onto power projects within the country and reduced debt burden could help them increase investments in domestic projects.

A top official from the company earlier said they are shifting focus onto power projects within the country and reduced debt burden could help them increase investments in domestic.

DAEL SEAL

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