Tata Power is going to acquire GMR’s 50 percent stake in InterGen, a US-based power company. InterGen has operations in the
This acquisition would increase Tata’s global presence in countries like
GMR acquired InterGen stakes for $1.1 billion in October 2008. GMR raised most of the money through debt but the company’s dividend did not cover the interest cost of the loan taken for acquisition. The fund GMR would procure through selling its InterGen stakes would be used to buy up more lucrative assets in
As on March 2010, Tata Power has a cash deposit and investment worth $1.7 billion. The company, if necessary, can raise money through selling equity. So, funding is not a problem. Normally, for thermal plant acquisition the cost ranges from Rs.30 million to Rs.40 million per Mw and less for gas-based plants.