GMR to up stake in South African coal firm
The GMR group plans to increase its equity stake in South Africa’s Homeland Energy, the company that owns coal mines, as part of its plan to consolidate ownership of the scarce commodity.
By TNN |
MUMBAI: The GMR group plans to increase its equity stake in South Africa���s Homeland Energy, the company that owns coal mines, as part of its plan to consolidate ownership of the scarce commodity. GMR, which has interests in developing airports, power projects and roads, already has 10% equity in Homeland���s coal mines and has the option to buy another 50% in the mines by September.
���We are currently doing the due diligence and will take a call (on raising our stake) in June. We will have to pay $125 million (about Rs 525 crore) for taking our stake to 50%,���said A Subba Rao, CFO of the company. The infrastructure major had earlier paid $30 million for the 10% stake.
GMR Energy is building two coal-fired power plants with a total generation capacity of 3,150 mw in Orissa and Chattisgarh. Coal has become a vital issue for the government with the cement and steel sectors ��� the main user industries, apart from power ��� blaming the commodity for a sharp rise in their prices.
Coal prices have trebled in the past year and reached record levels, with settlement prices for next year believed
to be rising to a record $152.2 per tonne.
At a conference on Wednesday, coal minister Santosh Bagrodia said the government has decided to maintain coal prices this year and also increase availability of coal through auctions. ���There will be no price hikes,��� said Mr Bagrodia, a move that would enthuse power, cement and steel companies that buy partly from state-owned coal firms.
Mr Rao said GMR���s profit in the fourth quarter was hit due to high initial costs, expenditure incurred on the Hyderabad International Airport and on increased salaries for the airport employees as per the recommendations made by the government.
GMR now has big plans from its airport operations, where Mr Rao said revenue could grow by 50% in the current fiscal year.
���We are currently doing the due diligence and will take a call (on raising our stake) in June. We will have to pay $125 million (about Rs 525 crore) for taking our stake to 50%,���said A Subba Rao, CFO of the company. The infrastructure major had earlier paid $30 million for the 10% stake.
GMR Energy is building two coal-fired power plants with a total generation capacity of 3,150 mw in Orissa and Chattisgarh. Coal has become a vital issue for the government with the cement and steel sectors ��� the main user industries, apart from power ��� blaming the commodity for a sharp rise in their prices.
Coal prices have trebled in the past year and reached record levels, with settlement prices for next year believed
to be rising to a record $152.2 per tonne.
At a conference on Wednesday, coal minister Santosh Bagrodia said the government has decided to maintain coal prices this year and also increase availability of coal through auctions. ���There will be no price hikes,��� said Mr Bagrodia, a move that would enthuse power, cement and steel companies that buy partly from state-owned coal firms.
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GMR on Wednesday said its fourth quarter net profit more than doubled to Rs 50.0 crore from Rs 21.8 crore last year. In the January-March period, the revenue rose 43% to Rs 885.2 crore. For the fiscal, its net rose 20.4% to Rs 210.1 crore and revenue grew 35% to Rs 2,294.7 crore.Mr Rao said GMR���s profit in the fourth quarter was hit due to high initial costs, expenditure incurred on the Hyderabad International Airport and on increased salaries for the airport employees as per the recommendations made by the government.
GMR now has big plans from its airport operations, where Mr Rao said revenue could grow by 50% in the current fiscal year.
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