Engineering and construction giant Larsen and Toubro (L&T) on Wednesday announced divestment of 100 per cent stake in a hydroelectric plant owned by its arm to Renew Power Services for Rs 985 crore.
Renew Power Services is a wholly-owned subsidiary of Renew Power Pvt Ltd.
This is in line with the declared L&T focus of divesting non-core assets and improving shareholder value, L&T said in a statement.
"Larsen & Toubro, today announced the divestment of 100 per cent stake in the 3 x 33 MW (99 MW) run of the river hydroelectric power plant owned by its subsidiary L&T Uttaranchal Hydropower Ltd (LTUHPL) to Renew Power Services Private Limited," the company said.
The transaction is subject to completion of customary closing conditions and closing is expected to take place before September 30. The sale consideration is Rs 985 crore.
"This development is a significant step in our effort to unlock the value of some of our power development assets to streamline and allocate capital to create long term value for our shareholders," Larsen & Toubro Whole-time Director D K Sen said.
"It represents our strategic effort to increase focus on our core strengths and exit others to move towards becoming a more asset-light organisation," he added.
On the acquisition, ReNew Power Chairman and CEO Sumant Sinha said, "Given that the asset is already operational, the acquisition is not only value accretive for us but also presents a lower level of risk. It strengthens our ability to provide firm and round the clock power to the grid and compliments our solar and wind assets, filling up an important position in our portfolio.
"We will be looking to acquire more hydro assets in future as they are the best clean balancing sources for intermittent renewable energy."
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