GVK POWER and Infrastructure (GVKPIL) is planning to divest 25% stake in its energy vertical.

GVK POWER and Infrastructure (GVKPIL) is planning to divest 25% stake in its energy vertical.

The company is in talks with some global private equity funds and a European bank for the proposed deal, which is valued at around $500-700 million. “We have got five confirmed term-sheets from four global private equity funds and one foreign bank. We hope to sew up the deal with one of them after our power plants commence operations by the year-end,” said a top official of the company who did not wish to be named. A term-sheet is a non-binding agreement setting forth the basic terms. The company is waiting for gas supplies from Mukesh Ambani-led Reliance Gas Corporation for two of its power plants in the state. “We will settle the transaction once the Vemagiri and Gautami power plants in east Godavari district start generating power,” said the official. Currently, these two power plants are lying idle. Reliance Gas Corporation has entered into an agreement with GVKPIL to supply 8.94 million cubic metres of gas per day for the gas-based power plants in Andhra Pradesh. The Mumbai-based company would be producing 40 million cubic metres per day of gas in the first phase. GVK Power & Infrastructure, an arm of the GVK group, has diversified businesses. It has a focus on infrastructure and urban infrastructure projects, besides interests in the hospitality, services and manufacturing sectors. The company owns, operates and maintains power plants by itself and through its subsidiaries. In February 2008, the GVKPIL incorporated GVK Energy as its wholly-owned subsidiary. Later, the company acquired both GVK Energy and GVK Developmental Projects.