Spectrum Power on the block

FIIs hold 35% in Spectrum, Indian promoters hold 32% while Rolls Royce holds 33%.

Spectrum Power is up for sale. Both SBI Cap and the lead banker to the company, Industrial Development Bank of India (IDBI), are scouting for a buyer.

Earlier, the lenders' plan for the gas-based power project in Kakinada, Andhra Pradesh, was to sell only a 35 per cent stake in the debt-ridden 208-MW power unit.

"Now, we have decided to sell the entire company because Rolls Royce also wants to exit," said banking sources. Rolls Royce holds a 33 per cent stake in the project.

A slew of players had shown interest and SBI Caps had started accepting expressions of interest, sources added.

Spectrum Power Managing Director Krishna Rao told Business Standard: "It is up to the banks and the financial institutions to decide whether to sell the company. I cannot comment on it."

Banks and financial institutions hold 35 per cent in Spectrum Power and Indian promoters 32 per cent, with the rest being held by Rolls Royce.

The promoters' shares are pledged to the lenders. This essentially means the lenders enjoy majority control at 67 per cent and can decide on the fate of the project.

The company's promoters had been searching for a strategic investor for over three years. Reliance Energy, Tata Power and the GVK Reddy group had shown interest in picking up equity in Spectrum Power but things did not materialise.

One of these players might be interested in buying the entire company, said sources.

Spectrum Technologies of the US had also been interested in putting in money but differences cropped up between the Indian promoters and the US backers.

The banks and financial institutions, lead by IDBI, IFCI, ICICI Bank, State Bank of India, UTI-I and IDBI, among others, have a combined exposure of about Rs 800 crore in Spectrum Power. Part of the debt was converted into equity, thereby giving the lenders a 35 per cent stake in the company.