YTL talks with India's NSL Group to acquire 49% in energy unit

Recently YTL Group managing director Tan Sri Francis Yeoh (pic) came under fire from various quarters for his remarks on Malaysia

PETALING JAYA: YTL Corp Bhd is said to be in talks with India’s NSL Group to acquire up to a 49% stake in NSL Orissa Power and Infratech, a company with the mandate to build and operate a thermal power plant.

“The talks are now in an advanced stage and due diligence process is currently going on,” the Economics Times quoted sources as saying.

Both YTL Corp and NSL Group did not reply to StarBiz queries.

According to the financial daily, NSL Group chairman Mandava Prabhakar Rao had confirmed that the group plans to sell a 49% stake in the power arm to raise funds but refused to divulge details.

“The deal could be entered at little over par of investments brought in by NSL promoters and YTL may pay premium payments over the next few years based on milestones,” he was quoted as saying. “We are discussing with potential strategic partners.”

Apart from the thermal plant, NSL Orissa Power is setting up a 1,320MW coal-fired power project in Angul district of Orissa involving an investment of around 8,000 crore rupees (US$1.314bil) which is being funded through debt equity of 70:30.

For the thermal power plant project, the company has acquired the site, obtained the clearances and even awarded the engineering, procurement and construction (EPC) contract to Tata Projects.

The report also stated that YTL was in negotiations with the NSL group to acquire a majority stake in the operations and maintenance arm of the projects in Orissa.

YTL has power assets across Malaysia, the United Kingdom, Singapore, Australia and Indonesia. YTL Power was the first independent power producer (IPP) in the country, having inked its power purchase agreement (PPA) in 1994 for its Paka, Terengganu and Pasir Gudang, Johor power plants.

YTL operates two combined-cycle, gas-turbine power plants in Paka (808MW) and Pasir Gudang (404MW). The concessions for both power plants end in September 2015.

Recently YTL Group managing director Tan Sri Francis Yeoh (pic) came under fire from various quarters for his remarks on Malaysia’s crony capitalism. This subsequently led to it pulling out of a power plant job in Johor Baru that was awarded to a consortium where the company was a member on a directly-negotiated basis.

In July, the Energy Commission announced that a consortium comprising SIPP Energy, YTL Power and TNB had been conditionally awarded the development of Project 4A, a new 1,000MW-1,400MW combined cycle gas turbine (CCGT) power plant in Johor.

YTL Power said that in view of the misconception about Project 4A, the company had decided not to participate in the project under the present arrangement to dispel any misgivings over the Government’s commitment to transparency and good governance.

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