Tata Power completes sale of stake in South African JV Cennergi

Tata Power said it completed sale of South African joint venture "Cennergi" for 1,550 million South African Rand (ZAR).

Khopoli Investments (Khopoli) (a 100% subsidiary of Tata Power) on 1 April 2020 completed the sale of the company's entire stake in Cennergi (Pty), a South African joint venture to Exxaro Resources, for an amount of ZAR 1,550 million and normal working capital and other adjustments.

Cennergi was a 50:50 joint venture between Exxaro and Khopoli, a wholly owned subsidiary of the Company. Exxaro is a leading South African coal producer. Exxaro has acquired the entire 50% shareholding of Khopoli and will now have 100% ownership of Cennergi.

Cennergi owns two wind farms -- Amakhala Emoyeni (134.4 MW with 95% shareholding) & Tsitsikamma Community Wind Farm (95.3 MW with 75% shareholding) -- in South Africa. Both projects have 20-year Power Purchase Agreement (PPA) with the State power utility Eskom.

"The decision to monetise this South African asset is in alignment with our stated strategy to deleverage the Balance Sheet by divesting sub-optimal size international assets," said Praveer Sinha, CEO & managing director, Tata Power. "The proceeds from such sale would be re-invested in emerging areas where there is a huge growth opportunity. The Company will focus on renewable power, power distribution and service-led businesses in India which will bring in greater value and help us align with the emerging consumer needs," he added.

Tata Power Company's consolidated net profit rose 26.08% to Rs 178.86 crore on a 11.42% fall in net sales to Rs 7,071.03 crore in Q3 December 2019 over Q3 December 2018.

Tata Power Company's principal businesses are in the areas of generation, transmission, distribution-cum-retail, power trading, power services, coal mines and logistics, strategic engineering for defense applications, solar photovoltaic (PV) manufacturing, and engineering, procurement and construction (EPC) services. The company's segments include power, coal and others.

Shares of Tata Power fell 1.90% to Rs 30.95. The stock hit a high of Rs 32 and a low of Rs 30.60 so far.

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