GMR Infra’s Canadian arm Homeland Energy to sell stake in 2 African projects

March 29, 2013

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28 MAR, 2013, 07.35PM IST, PTI

GMR Infra’s Canadian arm Homeland Energy to sell stake in 2 African projects

NEW DELHI: GMR InfrastructureBSE 3.11 % today said one of its Canadian arm, Homeland Energy Group Ltd (HEGL), has decided to sell stakes in two of its coal mines in Africa.In a statement, the company said that HEGL “has entered into an agreement to divest 50 per cent equity interest in TshedzaMining Resource (Pty) Ltd, which holds the license for the development of Eloff Mines.”

The purchaser of HEGL’s interest in the Eloff Mines is its existing partner, who holds rest of the 50 per cent stake in the property.

According to a filing of HEGL to Toronto Stock Exchange (TSX), the deal value is about USD 12 million for selling 50 per cent stake in Eloff Mines.

“HEGL wishes to announce that it has entered into an agreement dated March 25, 2013 to dispose of its 50 per cent interest in the Eloff Property, through the sale of shares of Tshedza Mining Resource (Pty) Ltd, in consideration for the payment of ZAR 110 million (approximately USD 12 million),” it said.

According to HEGL, the coal from Eloff can get exported to India but due to logistics infrastructure difficulties and evacuation costs, it would be uneconomical. Besides, risk associated with the project are too high, it said.

Moreover, HEGL has also entered into an agreement for selling its entire stake in Ferrat Coal (Kendal) Pty Ltd,GMRBSE 3.11 % said but did not disclosed the deal value.

GMR Energy, a subsidiary of GMR Infra, is the majority shareholder in HEGL. The two deals are subject to necessary regulatory approvals.

The Kendal mine is an operating mine and sell coal in African market, while the Eloff mine is under development stage, it added.

The two sell offs are part of GMR’s “asset light – asset right” strategy. Under this, the Bangalore-based infrastructure firm had raised about Rs 2,500 crore some time back by selling its entire 70 per cent stake in a Singapore-based power project and 74 per cent stake in a highway project.

Shares of GMR today closed at Rs 21.55 apiece on the BSE, up 3.11 per cent from the previous close.

Source-http://economictimes.indiatimes.com