Thermax Floats Co For Power Deals

Engineering major Thermax has floated a new company to set up power plants and offer operation and maintenance (O&M) services.

Called Thermax Co-Gen Pvt Ltd, the company will set up power plants on a build-own-operate (BOO) and build-own-operate-transfer (BOOT) basis. It will also offer (O&M) services for power and co-generation plants either put up by other developers or set up by the company with its associates.

The move takes the company forward from its current business of manufacturing power equipment and offering other services for the power industry.

Thermax proposes to infuse Rs two crore into this new company and has sought shareholder permission for this transaction under section 372 of the Companies Act.

 

As per the detailed note to all shareholders, Thermax Co-Gen Pvt Ltd will offer project integration services, engineering, procurement and construction contractors, operation and maintenance contractors of co-generation. Last month, Thermax it also entered into a pact with Allied Signal Power Systems, subsidiary of the $14.5 billion US-based AlliedSignal Inc, to market its micro turbine based power systems in India.

Its foray into power generation comes at a time when the government has put infrastructure and power on its priority list.

The new subsidiary has been set up for strategic and logistic reasons.

While the Co-Gen division of Thermax will continue to manage the project business in the power sector, the new company will handle areas such as studying project feasibilities, environmental needs, overall integration, specialised supervision, financial engineering, operation and maintenance.

Project financing is to be achieved through a combination of Indian and foreign funds.

Thermax has also identified market potential for offering specialised project integration services for some projects on a case to case basis.

The company's Co-Gen business has not been able to conclude any orders during 1997-98. However, Thermax is optimistic about finalising some in the next few months.

In 1997-98, the company's total income increased marginally by 1.5 per cent compared with 11 per cent last year.

Its net profits went up by 4 per cent this year which is an improvement over last year when profits dropped by 5 per cent.