KSK.L Regulatory News (KSK)

17th May 2011

KSK Power Ventur plc("KSKPV" or "the Company")

Developments With Respect to Indian Subsidiary and Shareholding

KSK Power Ventur plc (KSK.L), the power project company listed on the London Stock Exchange, with interests in multiple power plants and businesses across India, is pleased to announce the following update with respect to its subsidiary, KSK Energy Ventures Limited ("KSKEV"), the equity shares of which are listed and traded on the National Stock Exchange of India Limited ("NSE") and the Bombay Stock Exchange Limited ("BSE").

Tender offer for acquisition of additional shareholding in KSKEV

KSKPV through its subsidiaries currently collectively holds an interest in 204,706,586 equity shares in KSKEV (constituting 54.94% of the voting share capital of KSKEV).

KSK Energy Limited ("KEL"), a subsidiary of the Company, along with its downstream subsidiaries have now made a voluntary offer ("Open Offer") to the public equity shareholders of KSKEV to acquire up to 74,526,091 fully paid-up equity shares of KSKEV (constituting 20% of the voting share capita of KSKEV) at a price of Rs. 125.00 per share.

Upon completion of the Open Offer and assuming full acceptance of the Open Offer, KSKPV's interest would consolidate further to 74.94% of the voting share capital of KSKEV.

(a) Proposed Financing:

The proposed acquisition of the shares under the Open Offer is expected to cost KSKPV and its subsidiaries ("the Group") a total outlay of US$ 210 mn, which is proposed to be financed out of the existing cash balances and debt financing being raised by the respective acquiring companies.

(b) Estimated Timelines

The entire Open Offer process shall be in accordance with Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The current estimated timeline of the Open Offer is as outlined below

* Specified date is only for the purpose of determining the names of the shareholders as on such date to whom the Letter of Offer would be sent and all owners (registered or unregistered) of the equity shares of the Target Company are eligible to participate in the Offer anytime before the closing of the Offer.

In case the equity shares tendered in this Open Offer are more than the equity shares to be acquired under this Open Offer, the acquisition of equity shares from each public equity shareholder will be on a proportionate basis.

Full details of the public announcement regarding the Open Offer and latest developments / arrangements would be available from the KSK section of the NSE website (www.nseindia.com) and the BSE website (www.bseindia.com).

Business update

While, the long term outlook of the Group's business looks extremely positive and the proposed Open Offer is expected to further enhance its shareholding and value in the Indian subsidiary, the temporary disruptions in the wider environment affecting all power generators in India are expected to have an impact on the near and medium term performance.

The Company continues to make progress with the underlying power generation projects, both in terms of construction and on-going operations, and the first quarter of the current financial year is expected to witness the beginning of positive growth cycle ahead.

Commenting on the development, Mr. T. L. Sankar, Non-executive Chairman of KSK said:

"The tender offer to acquire an additional 20% shareholding in KSKEV validates and reinforces the strong belief the management has in the strong fundamentals and exciting business opportunities being pursued by KSKEV. We believe this is an extremely positive initiative and development for the Company and we look forward to the successful completion of the offer process. The acquisition, in addition to being extremely value accretive to the shareholders of the Company, also provides the necessary strength to support future growth and the pursuit of additional businesses by KSKEV"

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