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Tata Power slips on subsidiary's exit from South African JV

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Tata Power fell 1.40% to Rs 63.45 after the company said that its subsidiary will exit South African joint venture for $106 million.

Khopoli Investments (a 100% subsidiary of Tata Power) announced the execution of a share purchase agreement with Exxaro Resources for the divestment of entire 50% stake in Cennergi, a South African joint venture, for an amount of ZAR 1,550 million ($106 million), subject to normal working capital and other adjustments.

Cennergi is a 50:50 joint venture between Exxaro Resources and Khopoli Investments, a wholly-owned subsidiary of Tata Power Company. Exxaro is a leading South African coal producer. Under the agreement, Exxaro will acquire the entire 50% shareholding of Khopoli Investments. The agreement is likely to be completed by Q3FY20. Post this transaction, Exxaro will have 100% ownership of Cennergi.

Cennergi in turn owns two wind farms in South Africa - Amakhala Emoyeni (with a generation capacity of 134.40 MW and 95% shareholding) and Tsitsikamma Community Wind Farm (with a generation capacity of 95.30 MW and 75% shareholding). Each project has a 20-year Power Purchase Agreement (PPA) with the State power utility Eskom.

Meanwhile, the S&P BSE Sensex was down 281 points or 0.76% to 36,841.99.

On the BSE, 2.22 lakh shares were traded in the counter so far compared with average daily volumes of 26.01 lakh shares in the past two weeks. The stock hit a high of Rs 64.55 and a low of Rs 63.45 so far during the day.

The stock hit a 52-week high of Rs 86.15 on 29 Oct 2018. The stock hit a 52-week low of Rs 50.4 on 21 Aug 2019.

On a consolidated basis, the company's net profit fell 31.3% to Rs 190.89 crore on a 6.2% decline in net sales to Rs 7766.72 crore in Q1 June 2019 over Q1 June 2018.

Tata Power is India's largest integrated power company and, together with its subsidiaries & jointly controlled entities, has an installed capacity of 10957 MW.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, September 17 2019. 11:02 IST