Coastal Energen looking to buy out Al Rostamani stakes

Chennai, Jan 19 (IANS) Promoters of city-based Coastal Energen, which is setting up a 1,200 MW thermal power plant in Tuticorin, are in talks with investors to buy out the 15 percent stake held by the Al Rostamani Group of Dubai in the company, a top company official said Thursday.

The company, putting up the plant under the merchant power plant category, is planning to start generation by March 2013. By that time, it is hoping to sign a power purchase agreement (PPA) with the Tamil Nadu Electricity Board (TNEB).
“We are negotiating with the Al Rostamani group to buy out their 15 percent stake in Coastal Energen. The buyout is expected to happen in two to three months,” Ahmed A.R. Buhari, founder president and chief executive of the Coal and Oil group, told reporters here.
“We are also trying to bring in some other investors. We had 2-3 rounds of discussions. We may even place with them more than 15 percent.”
Coastal Energen is part of the Rs.2,200 crore Coal and Oil group having interests in coal imports, logistics, shipping and power generation.
“The Al Rostamani group had initially planned to take 30 percent stake in Coastal Energen but restricted its exposure to 15 percent,” N.K. Balaji, vice president, finance, told IANS.
He said the company’s current equity base was around Rs.850 crore.
According to Buhari, Coastal Energen has signed a PPA with the Tata group for around 500 MW and is hopeful of finalising some agreement with the TNEB.
“Tamil Nadu faces a power shortage of around 5,000 MW. We would like to supply to TNEB as well as to other industries. Talks are on with several high tension (HT) power consumers for supplies. We will also bid for TNEB power purchase tenders,” he said.
Speaking about the project’s current status, he said the boilers for the two 600 MW units had been lifted and bulk of the power plant equipment had landed from Chinese company Harbin Electric International.
“We had hired an American consultant to certifiy the efficiency of the Chinese boiler and turbine generator,” S.M. Zafrulla, managing director, said when asked about the quality issues faced by some power generators in India using Chinese equipment.
Coastal Energen has spent around Rs.4,000 crore till date on the project out of the total outlay of around Rs.5,700 crore.
According to him, Power Grid Corporation is laying the transmission lines to evacuate the power.