Coal news and updates

NTPC looking to buy units of 8-9 GW capacity

September 1: NTPC Ltd is expecting to acquire of 9-10 power plants with a total generation capacity of 8,000-9,000 MW and a final decision to this effect is likely to be taken by March 2015, the company’s Chairman and Managing Director Arup Roy Choudhury told reporters in Kolkata.

In February, the company had put in an expression of interest (EoI) inviting bids to acquire power plants.

“We have received 34 applications totalling about 55,000 MW. The due diligence is on for almost all and we are about to appoint a merger and acquisition consultant,” Choudhury said.

He said the company’s board has constituted a sub-committee, which is currently looking into the matter.

“We presume that by end of this fiscal, that is by March 2015, we should be able to pick up some power plants which are already in operation or will be soon,” the CMD said.

Though the applications have been received for power plants totalling 55,000 MW, the company realistically expects to acquire plants with capacity of 8,000-9,000 MW.

“We will acquire only those plants which have financial problems. Plants which have basic issues like lack of environment clearances or land will not be considered by us,” the CMD said.

Also, the company will only look at plants which have achieved financial closure or where they are ready but stuck at the last level of bank loans etc where things can be made viable by investing a small amount of money, he said.

“Plants which do not have coal linkages would also not be considered by us,” he said.

To a query, he said, “Why will we buy a plant, if we do not have any advantage? We have not come to do charity to anybody -- that is not our job.”

Asked about further details on what kind of plants have submitted EoIs, the CMD said, “Of the total applications received, none are state-owned plants but beyond this I would not like to speak at present.”

Asked how much time will be needed to take a call on the acquisition, Choudhury said, “Once the due diligence is done, it will come to the board for taking a call. We will mainly look at those plants which can be started immediately. We will not consider a plant that is going to come up in four years, because we can set up a new plant ourselves in four years!”

He also said NTP will not consider cases, where the cost of a plant is higher. Because, the CMD said, “if we can set up a plant at about Rs 5 crore per MW, we will not benefit by buying a plant which has per MW cost of more than Rs 5 crore.