December 03, 2008

Nagarjuna Fertilizers sells stake in Udupi power plant to Lanco

It is reported that Nagarjuna Fertilizers & Chemicals Limited has completely sold its 26% stake in inter state mega power project under construction at Udupi in Karnataka to the Lanco group. Nagarjuna Fertilizers’ 26% stake translated to INR 224 crore. Its exit takes Lanco group’s stake to 100% or about INR 860 crore.

Nagarjuna Fertilizers said that "There was no premium involved in the divestment as the project was under development. We want to stay focused on the fertilizer and petrochemical business."

Hyderabad based Nagarjuna group had taken over the project from Jayaprakash Engineering & Steel Company in 1995 and Lanco had earlier bought out Nagarjuna Fertilizers & Chemicals Limited’s 74% stake in May 2006.

Udupi Power Project has a power purchase agreement for 913.5 MW with Karnataka and another 101.5 MW with Punjab. The purchases by the two states are backed by a three tier payment security mechanism.