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GE Power India Sells Hydro and Gas Power Businesses

16 July 20243 mins read by Angel One
GE Power India Ltd. is selling its hydro business and gas power business through a slump sale. Through the sale, the company is looking to restructure its business.
GE Power India Sells Hydro and Gas Power Businesses
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GE Power India Ltd, a prominent entity in the Indian power generation equipment market, specializes in the engineering, procurement, and construction (EPC) of essential equipment for thermal and hydropower plants.

GE Power’s Hydro Business Sale 

GE Power India Ltd. is divesting its hydro business through a slump sale to GE Power Electronics (India) Pvt. This move is part of the company’s broader restructuring strategy, as announced in an exchange filing on Wednesday. The sale is subject to the prior consent of the company’s members and other regulatory approvals.

The hydro business will be sold at a premium of Rs 100.19 crore over the fair market value determined by an independent valuation. The transaction is expected to be completed in the last quarter of this fiscal year. By selling the hydro business, GE Power India aims to focus on service growth, retain its share in service upgrades, participate in margin and cash-accretive flue gas desulfurization (FGD) projects, increase the Durgapur load by supplying boiler OEM parts outside India, fabricate industrial equipment, and leverage the factory’s core competencies.

Gas Power Business Sale

GE Power India Ltd. is also selling its gas power business to GE Renewable Energy Technologies Pvt. for a lump sum of Rs 43.86 crore, excluding applicable taxes. The sale, expected to be completed by September 2024, is driven by the need to address the business’s outstanding current liabilities, which amount to a net liability of Rs 38 crore as of March 31, 2024. The divestment of the gas power business will improve GE Power India’s net worth by Rs 81.86 crore. The business mainly consists of project management and engineering services for new construction sites provided by GE Power India.

Conclusion: GE Power India’s divestment of its hydro and gas power businesses is a strategic move aimed at restructuring and improving the company’s financial health. The stock of GE Power currently trades at Rs.610.00 a piece up by 2.10% from its previous day’s closing price.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions

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