BS reported that GMR Energy, the subsidiary of GMR Infrastructure, has been offered a 33.53% stake in South Africa based Homeland Energy Group after the Indian firm decided to exit from the latter’s subsidiary.

According to the new offer, GMR could sell back its 10% stake in Homeland Mining & Energy SA to the parent company. Homeland Energy Group said that the shareholders have approved the issuance of 75.79 million shares to GMR Energy at Canadian CAD 0.46 per share.

At the offer price, the 33.53% would cost CAD 28.29 million for GMR. The stake will be transferred to GMR when it gives the 10% stake in Homeland Mining & Energy SA back to the parent company. GMR had bought the stake in April 2008 paying CAD 30 million.

During the time of the acquisition, GMR reserved its right to increase the stake up to 50% by September 2008 at USD 155 million. The parent company decided to repurchase GMR’s current 10% ownership in accordance with the terms of the share purchase agreement.

Under the agreement, Homeland has the right to satisfy the obligation in cash or in shares of the company. It has until January 4th to make the repayment. The share issue to GMR was approved by 99.8% shareholders of the parent firm at a special meeting held on December 30th.

In November, GMR had decided to back out from its acquisition of 50% stake in Homeland. Declining coal prices and findings in the due diligence had forced the company to withdraw its offer. Before it took the decision, GMR had bought 10% stake in Homeland for CAD 30 million. However, GMR’s decision to back out came after a round of price renegotiation with Homeland failed. The company had earlier successfully bargained a price reduction for acquiring the Netherlands-based Intergen.

GMR Energy had decided to acquire stake in Homeland’s subsidiary for sourcing coal for its two proposed power plants in Orissa and Chattisgarh with a combined capacity of 3,150 MW. The South African subsidiary owns Kendal Mine, Eloff coal mining project, the Northfield site reclamation project.

(Sourced from Business Standard)