Goldman, Macquarie set to buy 40% in PTC arm for Rs 120 crore
Private equity major Goldman Sachs and Macquarie are close to acquiring 40% equity in PTC Financial Services (PFS), the investment arm of power trading and advisory services company PTC India.
By Subhash Narayan & Soma Banerjee, TNN |
NEW DELHI: Private equity major Goldman Sachs and Macquarie are close to acquiring 40% equity in PTC Financial Services (PFS), the investment arm of power trading and advisory services company PTC India. The deal is expected to be in the region of Rs 120 crore.
Sources close to the development said the agreement on the terms and conditions of the deal has been reached and the deal would be inked shortly. When contacted, PTC chairman T N Thakur said: “We have reached an advanced stage of negotiations. But I would not like to comment on the details at this point.”
Both the private equity players would subscribe equal number (20% each) of shares in the company. PTC, formerly known as Power Trading Corporation, is diversifying beyond its traditional power trading business.
It has set up PFS as a wholly-owned subsidiary for providing financial services for power generation projects.
Registered as a non-banking finance company (NBFC), one of the main activities of PFS would be to pick up equity in
power projects and facilitate financial closure.
“Both US-based private equity Goldman Sachs and Australian fund Macquarie have confirmed their participation in PFS and would pick up 20% equity each in the NBFC. PTC would hold the remaining 60%,” a source said.
While PTC initially held 60% stake in PFS initially, it is expected to dilute its holding further to 26% when the capital of the NBFC is raised further. PTC proposal received a huge response from investors forcing it to appoint a consultant to finalise the equity partners for PFS.
The source said that PTC was also engaged in talks with Blackstone, Soloman Brothers and a few other private equity players for roping them as strategic partner in PFS.
It is understood that equity investment by PFS may be done through a fund (Energy Equity Fund) anchored by the company. The fund will tie-up money from both domestic and international markets for investing in the Indian power sector. It is expected that the fund may have a corpus of about Rs 2,000 crore.
The power sector requires funds to the tune of over Rs 10,50,000 crore during Eleventh Plan. After exhausting all financing options, a short-age (both equity and debt) of massive Rs 4,50,000 crore in envisaged.
Sources close to the development said the agreement on the terms and conditions of the deal has been reached and the deal would be inked shortly. When contacted, PTC chairman T N Thakur said: “We have reached an advanced stage of negotiations. But I would not like to comment on the details at this point.”
Both the private equity players would subscribe equal number (20% each) of shares in the company. PTC, formerly known as Power Trading Corporation, is diversifying beyond its traditional power trading business.
It has set up PFS as a wholly-owned subsidiary for providing financial services for power generation projects.
Registered as a non-banking finance company (NBFC), one of the main activities of PFS would be to pick up equity in
power projects and facilitate financial closure.
“Both US-based private equity Goldman Sachs and Australian fund Macquarie have confirmed their participation in PFS and would pick up 20% equity each in the NBFC. PTC would hold the remaining 60%,” a source said.
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The authorised share capital of PFS is Rs 600 crore while its paid up equity capital is likely to be around Rs 300 crore. While PTC initially held 60% stake in PFS initially, it is expected to dilute its holding further to 26% when the capital of the NBFC is raised further. PTC proposal received a huge response from investors forcing it to appoint a consultant to finalise the equity partners for PFS.
The source said that PTC was also engaged in talks with Blackstone, Soloman Brothers and a few other private equity players for roping them as strategic partner in PFS.
It is understood that equity investment by PFS may be done through a fund (Energy Equity Fund) anchored by the company. The fund will tie-up money from both domestic and international markets for investing in the Indian power sector. It is expected that the fund may have a corpus of about Rs 2,000 crore.
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PTC India will also raise Rs 1,200 crore in the current fiscal through placement to Qualified Institutional Buyers for financing its business development requirements. The money from the issue would also be used for capitalising PFS. The decision to float PFS is in line with this strategy where the company is also looking at participating in power as a equity partner and a financier.The power sector requires funds to the tune of over Rs 10,50,000 crore during Eleventh Plan. After exhausting all financing options, a short-age (both equity and debt) of massive Rs 4,50,000 crore in envisaged.
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