The $425-million private equity investment in Asian Genco was in the headlines three years ago, as it was the largest deal in an Indian power company. Then, the company came again in the headlines for a less fortunate reason — its dispute with the Sikkim government over the 1,200-Mw Teesta-III hydropower project.
Now, after months of battle, the government of Sikkim has decided to reach a settlement with Teesta Urja Ltd, developer of the project, by paying Rs 296 crore for a 26 per cent stake in the company. Early this year, Teesta Urja Ltd, which sold 50.9 per cent stake in the company to Asian Genco, and the government of Sikkim had locked horns as Teesta Urja did not dilute a 26 per cent stake in the company to the government, a pre-condition in the memorandum of understanding signed between the two.
The government approached the State Electricity Regulatory Commission against Teesta Urja and got an order for appointing a sole arbitrator. Teesta Urja had obtained a stay on the order by approaching the Central Electricity Regulatory Commission.
A K Giri, secretary of the state’s power and energy department, said, "We are reaching the settlement as we have already paid about Rs 162 crore out of a total payment of Rs 296 crore. We have received a small stake and will receive about 26 per cent stake once the payment is completed." According to him, the project is expected to be commissioned by September 2013. Athena Projects holds about 29 per cent stake in Teesta Urja Ltd.
In March 2010, a group of investors, led by Morgan Stanley Infrastructure Partners, had bought about 44 per cent stake in Singapore-based Asian Genco for $425 million. The other investors include Everstone Capital, General Atlantic, Goldman Sachs Investment Management and Norwest Venture Partners.
Mails sent to Morgan Stanley Infrastructure Partners and General Atlantic did not elicit any response.
At the time of investment, the company had projected Teesta-III as its largest project. The company, in which former Union power secretary R V Shahi is a consultant, had earlier raised funds from power trading firm PTC and Tiger Global Management. Apart from Teesta-III, it owns a coal-based thermal project in Andhra Pradesh, with a 1,320 Mw capacity.
