Power utility CESC diversifies with Firstsource buy

CESC-FIRSTSOURCE:Power utility CESC diversifies with Firstsource buy

Power utility CESC Ltd said it would pay 3.95 billion rupees for a 49.5 percent stake in Firstsource Solutions Ltd , a business process outsourcing company.

Including a mandatory open offer for another 26 percent of the shares, CESC expects to invest a total of 6.5 billion rupees to acquire Firstsource, which will help it expand outside the power sector.

"Growth opportunities in the power sector are getting ... somewhat challenging and returns from the power sector are also not as lucrative as they were," Sanjiv Goenka, vice chairman the RP-Sanjiv Goenka Group which controls CESC, told television channel CNBC TV18.

Firstsource will issue about 227 million shares, or 34.5 percent of equity capital, on a preferential basis to a unit of CESC at 12.10 rupees per share.

CESC has also separately agreed to buy a total 15 percent stake from existing Firstsource shareholders - Temasek Holdings, U.S.-based Metavante Investments and ICICI Bank - at 12.20 rupees a share, it said in a statement to the stock exchange.