Malaxmi group to rope in partner for energy wing

Is in talks with three listed entities, PE companies

Hyderabad-based Malaxmi Group is planning to rope in a partner for its energy division — Malaxmi Energy Ventures (MEV).

“Three parties have evinced interest in the proposal but we will wait for the right valuation,” said group chairman Y Harish Chandra Prasad.

The partner will be at a holding company level and this will not alter the joint venture agreements. Prasad did not reveal the details of the companies with which Malaxmi was in talks at this stage.

MEV is setting up a 1,050 Mw power plant in Orissa in joint venture with city-based Nava Bharat Ventures Limited through a special purpose vehicle — Nava Bharat Power Private Limited. Both the partners have a 50 per cent stake in the project, which has been allocated Rambia coal mine in Orissa. Three coal-fired plants, each with a capacity of 350 Mw, would be set up at an outlay of about Rs 5,250 crore with 75 per cent of it coming in as debt and the remaining as equity.

The financial closure for the Orissa project is behind schedule by six months. “It will take three months for the land acquisition to happen and another three months to achieve the financial closure,” Prasad said, adding Malaxmi was also in talks with Axis Bank, Power Finance Corporation and State Bank of India for raising capital. The project, which requires 1,100 acres, would be completed in 36 months from the date of achieving financial closure.

Prasad said the company had signed a power purchase with Power Trading Corporation to sell 75 per cent of the power produced and with Grid Corporation of Orissa for the remaining 25 per cent.

The Centre has allotted water from river Brahmani for the Orissa project.

MEV is also executing the 540 Mw Simhapuri coastal thermal power project on 500 acre at Krishnapatnam in Nellore district of the state with Maducon Projects Limited and one in Tuticorin district of Tamil Nadu of equal capacity. The company has achieved financial closure for Phase I apart from obtaining major clearances for the Simhapuri project. Its another wing, Malaxmi Energy Trading Private Limited, has secured an inter-state power trading licence.

“The confidence in the market is slowly building up. The slowdown has set the company back by 12 months and it used the lean period to enrich its landbank for other projects of the Group,” Prasad said.