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GVK has consolidated its infrastructure assets under one company making it an integrated
infrastructure player. As part of the consolidation, all the infrastructure assets
in Power, Airport, Road, and Mining will now come under one umbrella of GVK Power
& Infrastructure Limited (GVKPIL).
As a result of this consolidation, Mumbai International Airport Pvt. Ltd. (MIAL)
which operates India’s busiest airport, the Chhatrapati Shivaji International Airport
in Mumbai and GVK Jaipur Expressway Pvt. Ltd. which operates the six-lane toll road
project on the Golden Quadrilateral will come under GVKPIL.
The Board of Directors of GVKPIL and the Board of Directors of Bowstring Projects
& Investments Private Limited (Bowstring) & the Board of Directors Green Garden
Horticulture Private Limited (Green Garden) have approved a proposal for the amalgamation
of Bowstring & Green Garden with GVKPIL. Bowstring and Green Garden, both closely
held unlisted companies, hold equity stakes in various power and infrastructure
projects of GVK.
“The consolidation will align all GVK infrastructure companies under one roof thereby
enabling GVK to position itself as an integrated infrastructure company to leverage
emerging opportunities in this sector. It will also provide better realization of
value for our investors" said Mr GVK Reddy, Chairman & Managing Director GVK Power and Infrastructure Limited.
The Scheme of Amalgamation approved by the respective Boards envisages a share exchange
ratio of 133 (One hundred thirty three) equity shares of the face value of Rs 10/-
each of GVKPIL, for every 4 (Four) equity shares of the face value of Rs 10/- each
of Bowstring.
The Scheme also envisages a share exchange ratio of 153 (One hundred fifty three)
equity shares of the face value of Rs 10/- each of GVKPIL, for every 4 (Four) equity
shares of the face value of Rs 10/- each of Green Garden.
In the aforesaid meeting of the Board of Directors of GVKPIL, the proposal to issue
and allot equity shares in GVKPIL to members of GVK Industries Limited (GVKIL),
other than GVKPIL itself, in consideration for the transfer of and vesting in GVKPIL
of the equity shares held by such members in GVKIL in terms of Scheme of Arrangement
under section 391 of the Companies Act was also considered.
The proposed Scheme of Arrangement (Scheme) envisages a share exchange ratio of
3 (Three) equity shares of the face value of Rs 10/- each of GVKPIL, for every 40
(Forty) equity shares of the face value of Rs 10/- each of GVKIL.
The share exchange ratio approved by the Boards of the respective entities was based
on a valuation process incorporating international best practices. The entities
had appointed leading accounting firms, Deloitte, Haskins & Sells, and Dalal & Shah
to recommend the final share exchange ratio to the Boards of the entities. Amarchand
& Mangaldas & Suresh A. Shroff & Co. are the legal counsel for the entire process.
The Scheme of amalgamation and arrangement will be subject to various approvals
including those of Stock exchanges, shareholders of respective companies, any regulatory
authorities. The Scheme of amalgamation will have to be approved by the High Court
of Delhi and Scheme of Arrangement will have to be approved by the High Court in
Delhi and High Court in Andhra Pradesh. The Appointed Date of merger is proposed
to be April 1, 2006.
The benefits of the proposed Scheme of Amalgamation and Arrangement are:
- Create an integrated, comprehensive
infrastructure company that can cater to all segments of infrastructure and its
consolidate position as a leading company in the infrastructure sector thereby creating
substantial shareholder value
- Re-organization of the infrastructure
companies within GVK will enable better utilisation of resources and capital and
would create a stronger base for future growth of the infrastructure business in
general
- Create large balance sheet size to
participate in upcoming infrastructure projects
- Align interest of all shareholders
in a single listed entity and eliminate areas potential conflict of interest and
concerns of related party transactions
- Enable investors, existing shareholders
to participate in diverse infrastructure assets
- Unlock value in operating assets and
eliminate the need for multiple listing by group companies
GVK Power & Infrastructure Limited is a listed public company belonging to GVK,
engaged in the business of owning, operating and maintaining power plants by itself
and through its subsidiary/ associate companies.
GVKPIL presently owns 53.96% in GVK Industries Limited which operates the 216 MW
Jegurupadu Phase I gas based power plant and the 220 MW Jegurupadu Phase II gas
based project which is ready for commercial operations. GVKPIL also owns 44.97%
(to be increased to 51% in due course) in Gautami Power (464 MW Gas based power
plant) which is ready for commissioning.
THE NEW STRUCTURE POST-REORGANISATION
The proposed Scheme envisages consolidation of holdings of Bowstring and Green Garden,
direct and indirect, in various operating companies into GVKPIL, the flag-ship company
of GVK. Specifically, the following interests are proposed to be consolidated as
part of the Scheme of Amalgamation.
-
GVK Airport Developers Pvt. Ltd.
GVK Airport Developers is the holding company of GVK Airport Holding which holds
equity stake in Mumbai International Airport Pvt. Limited. MIAL has entered into
Operating Maintaining and Development Agreement with Airport Authority of India
in April 2006 for developing operating and maintaining the Mumbai airport. MIAL
has been operating the Mumbai airport with effect from 3rd May 2006.
- Alaknanda Hydro Power Company
Limited
Alakananda is developing a 330 MW Hydropower Project in the State of Uttaranchal.
Currently, the project is under the construction phase and the company has signed
a PPA with the Uttar Pradesh Power Corporation Limited.
-
GVK Power (Goindwal Sahib) Limited
Goindwal Sahib is developing a 600 MW coal based Thermal Power Plant at
Goindwal Sahib, in Punjab. The Company has initialed the draft Power Purchase Agreement
with Punjab State Electricity Board ("PSEB") in December 2006.
-
Goriganga Hydro Power Private Limited
Government of Uttaranchal has awarded 200 MW Mapang Bogudiyar and 170 MW Bogudiyar
Sirkari Bhyol Hydroelectric Projects on River Goriganga in Pithoragarh District
in the State of Uttaranchal. Government of Uttaranchal has agreed for implementation
of Single Integrated Project i.e. combining both the above projects as 370 MW Mapang-Sirkari
Hydroelectric Project.
-
GVK Jaipur Expressway Private Limited (GJEL)
A segment of the Golden Quadrilateral National Highway Development Project of Government
of India. GJEL was incorporated for designing, engineering, financing, constructing,
operating, maintaining and widening the 90.385 km existing 2 lane project highway
to 6 lanes on the Jaipur - Kishangarh section of the National Highway No. 8 in the
State of Rajasthan by entering into a concession agreement with NHAI for a period
of 20 years including construction period.
- GVK Coal (Tokisud) Company
Private Limited
Tokisud was incorporated to undertake coal mining activity. Tokisud will supply
its entire output to GVK Power (Goindwal Sahib) Limited for its exclusive consumption.