Bhilwara Energy to sell 10.8% stake to IFC, others for Rs 230 cr

LNJ Bhilwara Group firm Bhilwara Energy said on Monday it would dilute nearly 11 per cent stake to two foreign investors for raising Rs 230 crore (Rs 2.3 billion) to part-fund the company's power projects.

BEL will divest 10.8 per cent of fresh equity shares to Washington-based IFC and India Clean Energy Fund for $50 million ($25 million each), the company said in a press statement.

Post-divestment, the promoter holding in BEL will come down to around 83 per cent.

Of the promoters, RSWM -- formerly known as Rajasthan Spinning and Weaving Mills Ltd -- will see its holding in BEL come down from 19.5 per cent to 17.4 per cent, while HEG Ltd will see its shareholding fall to 25.5 per cent from 28.9 per cent.

"After the stake dilution, the total foreign interest stands at around 17 per cent," it said. In 2007, New York Life Investment Management India Fund, WIH Holdings and Jacob Ballas Capital had invested in BEL.

BEL is a principal-holding company for all the power ventures of the Bhilwara group.

The company currently has an 86 MW operating project, and a 192 MW hydro power plant is is likely to become operational this month.

The stake sale is to fund power projects in India and Nepal, the statement said.

BEL is implementing power projects with a capacity of 1,100 MW, and they need Rs 8,000 crore (Rs 80 billion) in funding over the next four years.

"The rationale behind the stake dilution is to fund our power projects under different stages of implementation," said Ravi Jhunjhunwala, chairman, LNJ Bhilwara Group.

"Current fund raising will help the company to attract other strategic investors and partners for its growth plans in the future. Funds will mainly be utilised for power projects in India and Nepal in the next few years," he said.

BEL holds 51 per cent equity stake in Malana Power Co Ltd, a joint venture with S N Power, Norway.

It has 44.9 per cent holding in AD Hydro Power Ltd (Manali) indirectly since MPCL holds a 88 per cent stake in AD Hydro Power Ltd.

The remaining 12 per cent in AD Hydro is with IFC. BEL also holds 51 per cent stake in power consultancy firm Indo-Canadian Consultancy Services Ltd, a joint venture with RSW Inc of Canada.

"IFC is excited to be able to support a pipeline hydro project planned by Bhilwara in continuation of our support of their AD Hydro power plant," said Paolo M Martelli, IFC director for South Asia.

"Bhilwara is one of the leading hydro power companies in the country and its project will go a long way in harnessing hydro power to meet power scarcity," he said.