Madhucon, Malaxmi Group to set up power plant

Hyderabad-based Madhucon Projects Limited is entering into the power sector in partnership with another Hyderabad-based company, Malaxmi Group, to set up a 540-mega watt thermal power project at the port town of Krishnapatnam. The Malaxmi group is promoted by Y Harish Chandra Prasad.

Both the companies have formed a special purpose vehicle, Simhapuri Energy Private Limited, for the project, to be completed in two phases of 270 mw each, according to a press release. The power plant would run on coal imported from Indonesia. Madhucon is also in the process of investing in coal mine in that country, it stated.

When contacted, Prasad said Madhucon and Malaxmi would hold 48 per cent and 26 per cent of the project's equity respectively while the strategic investors were expected to take the remaining stake. The project, to be funded in 20:80 debt equity ratio, is estimated to cost around Rs 2,600 crore.

"We have decided to partner Madhucon considering its debt-free balance sheet, which will help the project go ahead without any hitches," Prasad told Business Standard. According to him, the financial closure of the project is expected to be achieved in six months.