US based firm Blackstone announces Rs 1350 crore investment for a minority stake in Moser Baer Projects Ltd

In an investment that marks its biggest undertaking in India, US based buyout firm, Blackstone Group LP, Wednesday announced it was buying a stake in India’s Moser Baer Project Pvt. The stake acquisition will cost the US firm $300 million or about Rs 1350 crore. Blackstone Group LP is the world’s largest buyout company and the investment will give it a considerable minority stake in the Indian energy firm.

In an interview, Blackstone Group’s chairman for Indian operations said the firm would be investing the amount for a “significant minority stake” in Baer Project Pvt. Blackstone Group LP is headquartered in New York and has thus far invested $1.25 billion in 12 Indian firms. According to its chairman for the Indian operations, Blackstone Group intends to invest about $3 billion in India over the coming five years.

Of that amount, about $1 billion will be spent on investments in the power industry in India. The move is in line with the Indian government’s plan that seeks to bolster power generation capacity by 75% through the year 2017. India’s rapidly growing economy has brought about an increase in power demand, with blackouts on the rise.

The move is also aimed at driving economic growth further and the Indian Planning Commission expects half of the $1 trillion investment in highways, ports, airports and utilities planned between 2012 and 2017 will come from the private sector.

Blackstone Group’s planned investments are targeted at taking advantage of the demand for power in the country via the $1 billion planned investment in power companies in India. The chairman further reiterated that Infrastructure development will remain core to Blackstone Group’s investments in India.

The Moser Baer Project is expected to commission 4,000 megawatts of thermal power by 2016 and 1,000 megawatts of solar and hydro power. Moser Baer Projects Ltd said the investment would be used for financing its upcoming power plants. The company is building coal-based thermal power plants in Madhya Pradesh, Chhattisgarh, and Orissa. Other than that, it is as well implementing a 450 MW hydro power project in Himachal Pradesh and harvesting solar power in various parts India.

The Blackstone Group, L.P. is an alternative asset management and financial services company that specializes in private equity, real estate, and marketable alternative investment strategies, as well as mergers and acquisitions (M&A), restructuring, and fund-placement advisory services.

19 Aug 2010