Wartsila gets majority stake in TN project

CHENNAI, MAR 14: Balaji Power Corporation (BPC), which is implementing the 106mw furnace oil-based power project at Samayanallur near Mad...

CHENNAI, MAR 14: Balaji Power Corporation (BPC), which is implementing the 106mw furnace oil-based power project at Samayanallur near Madurai, has given up control of the project to its Finnish equity partner Wartsila.

Until recently BPC and Wartsila both held 40 per cent stake each in the Rs 130-crore equity of the project with the balance 20 per cent to be held equally by Finfund and Wartsila Development Fund.

According to BPC general manager (finance) S Nagarajan, Wartsila will hold 60 per cent stake in the project now. Apart from its earlier contribution of 40 per cent, Wartsila has also decided to acquire the balance 20 per cent originally earmarked for the two other Finland-based financial institutions. The 60 per cent stake thus gives Wartsila full control of the project.

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Wartsila is already the engineering, procurement and construction (EPC) and operation and maintenance contractor for the Samayanallur project.

Nagarajan said the entire debt portion of Rs 280 crore has been tied up,including a foreign currency loan of $60 million. BPC was, sometime back, struggling to get a bank guarantee for an $11 million foreign line of credit. The firm has got approvals for the $60 million foreign loans from a consortium of Indian banks including ICICI, IDBI and Bank of Baroda and PFC which has underwritten $20 million as its part for the foreign line of credit. Indian Overseas Bank has agreed to provide a term loan of Rs 38.3 crore for the project. Financial closure is expected by June 99.