GMR acquires 50-per cent stake in InterGen for $954 million

15 October 2008

Hyderabad-based GMR has announced the completion of its previously announced acquisition of a 50-per cent stake in the Netherlands-based global power generation company InterGen N V for $954 million from AIG Highstar Capital II, L P, a private equity fund sponsored by AIG Global Investment Group, an indirect subsidiary of the stricken American International Group, Inc that has received a $85 billion infusion from the US government ( See: Fed pumps another $37.8 billion in AIG) .

GMR Infrastructure Limited now jointly owns InterGen with the Ontario Teachers' Pension Plan, one of Canada's largest financial institutions with net assets of $85 billion. Ontario Teachers' has been a 50-per cent owner of InterGen since 2005.

This is GMR's second international transaction after it acquireda 20-year operations licence to operate Istanbul's Sabiha Gökçen International  in May 2008, after its expansion and modernisation (See: GMR takes over Istanbul airport for modernisation and operations). The airport is located on the Asian side of Istanbul, and would help  ease the pressure on the main Ataturk International Airport located on the European side of the city.

InterGen is a global power generation firm with 12 power plants representing a total generation capacity of 812,766 MW (8,086 MW of operational capacity and 4,680 MW under development) located in the UK, the Netherlands, Mexico, the Philippines and Australia. These facilities include 5,803 net equity MW in operation and 428 MW under construction.

GMR said that it had signed definitive agreements with the sellers, AIG Highstar Capital and its affiliates, on 20 June and sought various antitrust approvals in US, Europe, Mexico, Australia and the Philippines, following which  it completed the transaction on 9 October.

GMR will finance the acquisition cost through debt funding from Axis Bank, ICICI Bank, Bank of India, Canara Bank, Bank of Baroda and Indian Bank.
This transaction was executed through financial advisor N M Rothschild & Sons, and legal advisor White & Case LLP.