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FEB 06 2013

Dainik Bhaskars power arm Diliigent Power in talks for Rs 800crore PE funding

  • Economic Times, ET Bureau / Hyderabad
  • Created: Wed 06th FEB 2013

DainikBhaskar Group's power generation arm, Diliigent Power, is in talks with leadingprivate equity players to raise around Rs 800 crore to fund its thermal powerprojects, said three persons with direct knowledge of the development.

Accordingto sources, Diliigent is in talks with various PE players, including Actis,Khazanah, JP Morgan, Carlyle and IDFC , to raise money to finance itspower projects. "The company has appointed investment bank Avendus to helpit raise the money.

Thecompany will soon enter into exclusivity with one of these funds and take thediscussions ahead," said an investment banker with knowledge of thecompany's plans. Avendus had also advised the company in 2011 when it raised asimilar amount from Warburg Pincus. This would be its second round of fundraising. Queries sent to Diliigent remained unanswered at the time of going topress.

DiliigentPower, an independent power producer, had plans to set up a generation capacityof 6,400 MW but like most peers, it has decided to go slow on capacity additiongiven the problems plaguing the power sector. It is focusing on thecommissioning of its 1,200 MW coalbased thermal power plant, which has acaptive coal block and coal linkage, in Chhattisgarh later this year. "Thecompany has put other projects on the back burner. We will start work on the1,320 MW Madhya Pradesh plant only after the completion of the Chhattisgarhproject," said a company source.

Power utilitieshave been bogged down due to shortage of fossil fuel, delayed execution ofprojects, units running at low capacity and the poor health of stateelectricity boards. Most of power companies are seeking equity investors asthey struggle to manage huge debt amid muted cash flows, while investors withdeep pockets continue to be cautious about investing in the sector. "PEinvestors are flooded with offers from power companies but deals have notfructified as a lot of these projects have run into trouble either owing todelays in execution or the non-availability of fuel. Diliigent Power isattractive because its project are on track," an expert, who had analysedDiliigent's offer for one of the PE firms, said on condition of anonymity.Companies like GMR , GVK, Lanco and Ind Barath are also believed to bein talks with prospective PE investors for stake sale.


Madhya Pradesh JP Morgan Power

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