Lehman Brothers to sell stake in KSK JV

KSK Power Ventur--a company listed on the Alternative Investment Market (AIM) of London Stock Exchange--today announced that the company would reorganise its joint-venture arrangements with Lehman Brothers India Holdings for investing in power generation projects in India.

Lehman held 90% stake in the JV company, KSK Electricity Financing India (KSKFIPL), while the remaining 10% was held by KSK through its two wholly-owned subsidiaries KSK Energy (KEL) Mauritius and KSK Energy Ventures (KSKEV).

Under the re-organisation, Lehman would sell its entire stake in KSKFIPL to KSKEV for a net consideration of $85 million. Lehman would also subscribe for a 33.42% stake in KSKEV with another investor subscribing to 1.58% in KSKEV, KSK said in a filing to the London Stock Exchange.

KSK was also planning to raise around $100 million through a subscription of new shares by various employees, details of which would be announced separately, it added.

KSK, through KEL will be holding 65% of KSKEV which, in turn will be holding 100% in KSKFIPL.

Lehman would be paying a value development fee of $7.6 million to KEL, in recognition of its efforts for the value creation for shareholders of KEFIPL to date, the filing said.

S Kishore, executive director, KSK Power Ventur, said: "These are significant and very positive steps in the overall development of the KSK Group. We continue to explore all opportunities to help maximise shareholder value, including any potential Indian IPO of our SPV interests. We presently have a pipeline of over 7200 MW, with further progress being made."