CorporateIndia Power combine wins bid for control of DPSC
In an all-cash deal, a consortium of India Power Corporation Ltd (IPCL) and Srei Infrastructure Finance Ltd has won the bid for a controlling stake of 57.17 per cent in DPSC Ltd (formerly Dishergarh Power Supply Company), which was previously held by public sector units Andrew Yule, Life Insurance Corp and United India Insurance.
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In an auction held today, the consortium was selected from amongst three other bidders — CESC, Descon and Patton India — with a winning bid of Rs 710 per share. While Patton India was disqualified from taking part in the bidding process as it did not give a bank guarantee, RPG Group’s flagship, CESC, offered up to Rs 625 a share and Descon posted the second highest bid at Rs 705 a share, Andrew Yule chairman and managing director Kallol Datta said. The floor price for the auction, which entailed 16 rounds of bidding, was set at Rs 350 a share.
“The stake sale at Rs 710 per share has raised Rs 171.85 crore. The divestment will have to be attested by the Centre and, as in the Securities and Exchange Board of India (Sebi) guidelines, the consortium will have to make an open offer for 20 per cent. Andrew Yule will retain about Rs 42 crore from the sale in proportion to its shareholding,” Datta said.
The completion of the divestment process has been substantially delayed, with Andrew Yule and Descon, a DPSC subsidiary, locked in a tussle over participation rights in the auctioning process. Descon, which until the stake sale was the single largest shareholder in DPSC, has pledged its entire 32.31 per cent holding to Sajjan Jindal-controlled JSW Energy.
Meanwhile, consortium-member IPCL, which is a 50:50 joint venture between Bhaskar Silicon and Srei, is hoping to harness the existing facilities of DPSC to expand its power generation and distribution business.
“The distribution network of DPSC is a good fit; as well as that, the company has know-how of the sector. We will implement the 500 Mw plant at Burdwan and also look to expand the network,” Bhaskar Silicon director Jyoti Poddar said. Presently, DPSC distributes about 125 Mw of power across an area of 680 sq km and generates approximately 42 Mw.
A part of the power generated at IPCL’s proposed 450 Mw thermal power plant at Haldia could also be fed into the distribution network of DPSC.