Macquarie SBI Infra Fund to invest $130 mn in Moser Baer

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Macquarie SBI Infrastructure Fund is picking up a minority stake in Moser Baer Projects Private Ltd's Madhya Pradesh power unit for Rs 580 crore ($130million).  MB Power (Madhya Pradesh) Limited (MBPMPL), a subsidiary of Moser Baer Projects, is developing a 2,520 MW thermal power plant in multiple phases at Anuppur, Madhya Pradesh.

The plant will involve an investment of Rs. 13,700 crore ($3 billion), with the investment from the fund covering the first phase of 1,200 MW which  will cost Rs 6,240 crore.

New Delhi-based Moser Baer Projects plans to commission 5,000 MW by 2016 comprising of 4,000 MW of thermal, 500 MW of solar and 500 MW of hydro capacity. Part of the Moser Baer group, it has already sold a significant minority stake to private equity major Blackstone for $300 million or Rs 1,350 crore last year.

Macquarie SBI Infrastructure Fund has invested $600 million in 2010 with deals like Adhunik Power and Natural Resources, VIOM Networks Limited, among others. Power generation players have attracted significant capital from private equity players in 2010 with investments worth more than $1.7 billion during the calendar year.

Edelweiss acted as the financial advisor to MBPMPL on the transaction.

MBPMPL has tied-up debt of Rs 4,680 crore for the first phase of the project in Nov 2009 with SBI and Axis Bank as the lead banks. The 2520 MW Thermal power plant is expected to be commissioned in phases by the end of 2014. The EPC contract for phase 1 of the project has already been awarded to Lanco Infratech Ltd and construction at the site has commenced. This project is located near major coal fields of South Eastern Coalfields Limited and is close to power deficit markets of Maharashtra, Gujarat and Madhya Pradesh.

"Since Madhya Pradesh today faces a 17.7% power deficit, our power project will significantly address the states requirement of power and will additionally create large employment opportunities and augment the socio-economic development in district Anuppur and in the region,"
said Lajpat Shrivastav, CEO, Thermal Business, MBPPL.

The Moser Baer group has been able to generate significant private equity funding for its various businesses. In 2004, Moser Baer India raised $149 million from private equity major Warburg Pincus, who till date holds a considerable stake in the firm. Moser Baer Photovoltaic, which manufactures photovoltaic cells and modules for residential, commercial, and industrial applications, has also raised nearly $200 million in private equity funding across two rounds. Investors include IDFC Private Equity, CDC Group plc, Nomura Holdings Inc., Credit Suisse Group and Morgan Stanley.

By: Madhav Chanchani