In another move to shed its international assets, GMR Infrastructure has initiated a process to exit its 55 per cent stake in Canada-based publicly held Homeland Energy Group, for $100 million.
GMR had acquired majority stake in Homeland Energy during 2008. The company has coal reserves of 350 million tonnes in South Africa and is a significant shareholder in Homeland Uranium Inc, a Canadian exploration and development entity for the mineral, focused on projects in Niger and America.
GMR Infra - based in this city and a developer of airports, energy projects and highways - had taken majority stake in this company for around $50 million to secure fuel supplies for its power projects in India. GMR has 830 Mw of operational assets and is on track to operationalise 1,500 Mw during 2012-13. However, it has been facing issues over lack of infrastructure at a port near the mines, which is not conducive for exports at this point.
Raaj Kumar, chief executive officer, energy, told Business Standard they'd hoped the infrastructure would be set up to export the coal to India. "But there has been no progress. Given the circumstances, we will have to explore exiting that asset," he said, declining to give a timeframe. Another senior management official confirmed the process to exit the asset had begun and they were looking to sell at $100 million. The annual revenue of this company is around $30 million.
In addition to this asset, GMR Infra has major ownership of two coal mines in Indonesia, for which is has invested close to $600 million. While one has reserves of around 100 million tonnes, another, Golden Energy Mines, has around 900 mt of reserves, for which GMR paid around $450 million for a 30 per cent stake.
As and when GMR manages to exit its stake in the Canadian company, it will be the second major divestment it will be undertaking in a global location. Prior to taking this asset, it had sold off its 50 per cent stake in the US-based power producer Intergen for nearly $900 million. Intergen was operating a clutch of power projects across the world and GMR exited this asset in favour of a Huaneng of China, stating they'd increase focus on India projects.
GMR has one power project still, in Singapore, generating 800 Mw, in which Malaysian conglomerate Petronas is a 30 per cent stakeholder.