Gayatri Proj to divest stake in power unit

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Gayatri Projects will dilute 49% stake in its 1,320 MW power project unit to a strategic partner in next two months and hopes to tie up the debt component for this by March end, a top official said.

"Equity component is around 1,600 crores (Rs 16 billion). We are looking at diluting 49% to a strategic partner, we should be able to close the documents in next two months," Managing Director TV Sandeep Reddy told Reuters.

Talks are on with "couple of companies" which are power utilities, Reddy said in a telephonic interview. He did not name the companies.

Gayatri Energy Ventures, a wholly-owned unit of Gayatri Projects, is setting up a power plant near Krishnapatnam in southern India, under a wholly-owned special purpose vehicle.

The company has got environmental clearance, has tied up coal for the project. It is in possession of 1,400 acres for the purpose, he said.

"We are in a advanced stage of financial closure. Hopefully, by end of this month we will tie up the debt," Reddy said.

Gayatri group hopes to sell 70% of power from the project via long term contracts and the rest via merchant market, after the project gets commissioned in three years, he said.

Infra projects

The company is the lowest bidder for road projects worth about 23 billion rupees and will bid for at least Rs 50 billion worth of similar before June, Reddy said

"We are qualified for another 50 projects of NHAI (National Highways Authority of India). We will be bidding, so we might be successful in another two or three more (projects)," he said.

The firm's current order book stands at Rs 60 billion, he added.

"We are confident of getting another 2,000 crores (Rs 20 billion) of NHAI projects."

Gayatri Projects expects an FY11 turnover of Rs 18 billion and hopes to achieve revenue of 12-13 billion for the financial year ending March 2010, Reddy said.

At 2:36 pm, the shares in the firm were trading up 1.46% at Rs 405.45, in a Mumbai market that was trading down 0.14%.