CESC announces acquisition of 51% stake in Dhariwal Infrastructure

August 29, 2009: CESC Ltd on Friday announced the acquisition of a 51% stake in Dhariwal Infrastructure Ltd, a Manikchand group company, for Rs 200 crore. CESC vice chairman Sanjiv Goenka said the company has built up a Rs 1000-crore corpus to fund similar acquisitions in the future.

"The size of this warchest for acquisitions is about Rs 1,000 crore. Talks are on with a few potential takeover candidates and negotiations are at various stages. We will make announcements as and when they mature. CESC is open to taking over more power companies in Maharashtra and the companies we are in talks with are all outside Bengal," said Mr Sanjiv Goenka, vice chairman of CESC Ltd.

"Talks were on from January and the GMR group was a close contender. CESC's acquisition was an all-cash deal for a management stake in DIL. Consultant firm, KPMG advised DIL on the sell-off, while CESC negotiated the takeover with its own set of experts. CESC financed the takeover from internal accruals.

"Manikchand group company DIL has been promoted by three individuals - Vijay Garodia, Ajit Saria and R Dhariwal. However, we are not aware of the individual holdings of the three promoters in DIL," said Mr Goenka, when asked on its background. Manikchand group officials could not be reached for a comment.

Coal linkage for the thermal power project has been received from Coal India's subsidiary -- South Eastern Coalfields and water availability has been tied up for the project. Environment clearance is at an advanced stage. We hope to receive MoEF clearances from the ministry soon.

Source: The Economic Times