GMR Infra's Canadian arm to sell stake in two African projects

GMR Infrastructure today said one of its Canadian arm, Homeland Energy Group Ltd (HEGL), has decided to sell stakes in two of its coal mines in Africa.

In a statement, the company said that HEGL "has entered into an agreement to divest 50% equity interest in Tshedza Mining Resource (Pty) Ltd, which holds the license for the development of Eloff Mines."

The purchaser of HEGL's interest in the Eloff Mines is its existing partner, who holds rest of the 50% stake in the property.

According to a filing of HEGL to Toronto Stock Exchange (TSX), the deal value is about $12 million for selling 50% stake in Eloff Mines.

"HEGL wishes to announce that it has entered into an agreement dated March 25, 2013 to dispose of its 50% interest in the Eloff Property, through the sale of shares of Tshedza Mining Resource (Pty) Ltd, in consideration for the payment of ZAR 110 million (approximately $12 million)," it said.

According to HEGL, the coal from Eloff can get exported to India but due to logistics infrastructure difficulties and evacuation costs, it would be uneconomical. Besides, risk associated with the project are too high, it said.

Moreover, HEGL has also entered into an agreement for selling its entire stake in Ferrat Coal (Kendal) Pty Ltd, GMR said but did not disclosed the deal value.

GMR Energy, a subsidiary of GMR Infra, is the majority shareholder in HEGL. The two deals are subject to necessary regulatory approvals.

The Kendal mine is an operating mine and sell coal in African market, while the Eloff mine is under development stage, it added.

The two sell offs are part of GMR's "asset light - asset right" strategy. Under this, the Bangalore-based infrastructure firm had raised about Rs 2,500 crore some time back by selling its entire 70% stake in a Singapore-based power project and 74% stake in a highway project.

Shares of GMR today closed at Rs 21.55 a piece on the BSE, up 3.11% from the previous close.