Lehman JV Re-organisation
KSK Power Ventur PLC
28 January 2008
For immediate release 28 January 2008
KSK Power Ventur plc
('KSK plc' or 'the Company')
Re-organisation of Lehman JV and employee share subscription
KSK Power Ventur plc (AIM: KSK), the power project development company with
interests in multiple power plants across India, is pleased to announce the re-
organisation of the Lehman JV arrangements with LB India Holdings Mauritius I
Limited ('Lehman'). The Lehman JV was established to invest in captive or other
power generation projects and has successfully invested in a range of such
initiatives.
The joint venture company established under these arrangements was KSK
Electricity Financing India Private Limited ('KSKFIPL'), in which KSK, through
its wholly owned subsidiaries, KSK Energy Limited Mauritius ('KEL') and KSK
Energy Ventures Private Limited ('KSKEV'), held 10% of the equity and Lehman
the remaining 90%.
Under the re-organisation, Lehman is selling its entire stake in KSKFIPL to
KSKEV and is subscribing for a 33.42% stake in KSKEV with another investor
subscribing for 1.58% in KSKEV, with KSKEV to pay net consideration of US$ 85
million.
Approximately US $ 100 million will be raised by KSK plc, through a subscription
of new shares by various employees, further details of which will be announced
separately.
Consequently, KSK, through KEL, will hold 65% of KSKEV, which in turn will hold
100% of KSKFIPL.
In recognition of KEL's outstanding 'efforts and the value creation for the
shareholders of KEFIPL to date' Lehman is paying a Value Development fee of
US$7.6 million to KEL.
The broad details of re-organisation are as follows:
1. The preference shares in KSKEV held by KEL, have been converted into equity
shares of KSKEV at par and a bonus issue of equity shares has been made.
2. KEL and its 100% subsidiary KSK Energy Company Private Limited (KSKECPL), has
entered into Development Agreement with multiple down line SPVs of KSKFIPL.
3. KSKEV's interest in the legacy SPV projects, being RVK, Athena, Kasargod and
Coromandel, are being transferred to KSKECPL along with the Small Is
Beautiful Fund investments and management.
4. KEL and Lehman have entered into a share subscription agreement and a voting
rights agreement.
5. Under a share purchase agreement, KSKEV has acquired all Lehman's shares in
KSKFIPL.
For the year ended 31st March,2007, the profit before tax in KSKEV was Rs.159
million and it had gross assets of Rs. 3.14 billion. For the year ended 31st
March,2007, the loss before tax in KSKFIPL was Rs.9.02 million and it had gross
assets of Rs. 284 million.
Commenting on this re-organisation and employee subscription, S. Kishore,
Executive Director of KSK Power Ventur plc said:
'These are significant and very positive steps in the overall development of the
KSK Group. They will allow us to fully focus on the various services we can
offer as well as more clearly identify the value in our investments in our
various power plant projects. We continue to explore all opportunities to help
maximise shareholder value, including any potential Indian IPO of our SPV
interests. .We presently have a pipeline of over 7200 MW, with further progress
being made. Good progress has also been made with respect to financial
arrangements. We are delighted at this development in our Lehman relationship
and are looking forward to continuing our value creation efforts.
I am also pleased that we are able to extend KSK plc share ownership among our
employees through the anticipated subscription scheme.We all very much
appreciate how they have contributed to the overall growth of KSK and all our
operations '.
For further information, please contact
KSK Power Ventur plc +91-40-23559922
S. Kishore, Executive Director
K.A. Sastry, Executive Director
Arden Partners plc +44 (0)20 7398 1632
Richard Day
Adrian Trimmings
Buchanan Communications Limited +44 (0) 20 7466 5000
Mark Edwards
Ben Willey
See our website on: www.ksk.co.in
This information is provided by RNS
The company news service from the London Stock Exchange
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