Tata Power eyes sale of noncore assets to cut debt

MUMBAI: Tat a Power Ltd is trying to sell non-core assets to reduce debt, chairman N Chandrasekaran said, even as it struggles to find a solution to its vexed Mundra power project.

“The company is examining various debt reduction options including sale of non-core assets,” Chandrasekaran said at Tat a Power’ s 98 th annual general meeting (AGM) in Mumbai. He said Tata Power is in the process of identifying those assets for sale. The company now has a gross debt of ₹48,816 crore.

Chandra seka ran also said the company has ear marked around ₹3,000 crore as capital expenditure for the next one year, to be financed by internal accruals.

The other headache is Coastal Gujarat Power Ltd (CGPL), the Tat a Power unit that runs a 4,000 megawatt (MW) ultra-mega power project at Mundra in Gujarat. After the plant became un viable and it failed to convince its customers to pay more, CG PL applied to the electricity regulator to let it charge higher tariffs. The appellate electricity tribunal allowed compensatory tariffs to makeup forthe higher costs, but this was struck down by the Supreme Court in April this year. The company then offered to sell 51% stake in CGPL for ₹1.

Chandrasekaran also said Tat a Power has more than 90 subsidiaries and associate firms and “the company is working on a plan to simplify the corporate structure where feasible.”