HomeBusinessTata Power arm announces its exit from South African Joint Venture Cennergi for $106 mn

Tata Power arm announces its exit from South African Joint Venture Cennergi for $106 mn



As a part, its strategy to cut its financial liabilities and focus on the domestic market, Tata Power on September 17 announced exit from its investment in Cennergi, a South African joint venture for USD 106 million.

The company’s wholly-owned subsidiary, Khopoli Investments, has executed a share purchase agreement with its joint venture partner Exxaro Resources for divestment of 50 percent stake in Cennergi for USD 106 million.

- Advertisement -

In 2012, South African coal producer Exxaro and Khopoli Investments formed a 50:50 joint venture to create a new energy company, Cennergi, mainly to focus on projects in South Africa, Botswana and Namibia.

“Under the agreement, Exxaro will acquire the entire 50 per cent shareholding of Khopoli Investments. The agreement is likely to be completed by the third quarter of this fiscal. Post this transaction, Exxaro will have 100 percent ownership of Cennergi,” the company said in a statement.

The agreement will be subject to normal regulatory approvals customary for the transaction. Cennergi owns two wind farms in South Africa – Amakhala Emoyeni, having a capacity of 134.4 MW and 95 percent shareholding, and 95.3 MW Tsitsikamma Community with a 75 percent shareholding. Each project has a 20-year PPA with the state power utility Eskom.

“The decision to monetise this South African asset is in alignment with our stated strategy to deleverage the balance sheet by divesting sub-optimal size international assets,” Tata Power CEO and Managing Director Praveer Sinha said.

- Advertisement -

He said the proceeds from such sale would be re- invested in emerging areas where there is a huge growth opportunity.

“The company will focus on renewable power, power distribution and service-led businesses in India which will bring in greater value and help us align with the emerging consumer needs,” he added.

- Advertisement -

Commenting on the development, Exxaro Resources CEO Mxolisi Mgojo said, “we are pleased with this opportunity to consolidate our interest in this renewable energy asset at a time in South Africa where we need energy security as we respond to increasing negative sentiment towards coal-based electricity generation.”

ABSA Bank was the sole advisor to Khopoli for the transaction


Get quick snaps of everyday happening, directly in your inbox.

We don’t spam! Read our privacy policy for more info.

- Advertisement -
Krishna Mali
Krishna Mali
Founder, CEO & Group Editor of TechGraph.

More Latest Stories

Related Stories