KSK.L Regulatory News (KSK)

8 June 2010

KSK Power Ventur plc ("KSKPV" or "the Company") Supplementary Development Agreement with Lehman

KSK Power Ventur plc (KSK.L), the power project company listed on the London Stock Exchange, with interests in multiple power plants across India, is pleased to announce the execution of a supplementary development agreement dated 7th June 2010 ("SDA") with LB India Holdings Mauritius I Limited ("LBIHMIL") with respect to grant of a right of first refusal ("ROFR") on certain indirect shareholding interests of LBIHMIL in KSK Energy Ventures Limited ("KSKEV"), the Indian listed subsidiary of the Company.

LBIHMIL along with LB Mauritius I Limited and associates (collectively referred to as "Lehman") are part of the Lehman Brothers group and their ultimate parent Lehman Brothers Holdings Inc. is currently in bankruptcy proceedings and is being administered by Alvarez & Marsal, its court approved restructuring firm. The execution of the SDA is part of the calibrated disengagement of Lehman from the KSK group and orderly disposal of the shares of KSKEV held by Lehman.

Lehman currently holds 70.7 million shares (18.9%) in KSKEV. As notified in November 2009, Lehman has already locked up 45.58 million of these shares (12.23%) in KSKEV until October 2011 through a share lockup agreement entered into with the Company. Of the balance, 24.23 million shares (6.5%) in KSKEV held by Lehman are now dealt with in the SDA.

The SDA provides, inter alia, as follows:

·; The Company has been granted a right to acquire from LB Mauritius I Limited the entire share capital of LB Mauritius III Limited, which in turn holds 13.7 million shares (3.67%) in KSKEV for a fixed consideration of USD 52.7 million.

·; In respect of 10.52 million shares (2.83%) of KSKEV held through another LBIHMIL company, an alternate third party investor has been granted the right to acquire the same for a fixed consideration of USD 40.5 million.

·; The rights to acquire the above interests are to be exercised on or before June 2011. In the event the Company or the nominated alternate third party investor does not exercise their respective rights, the SDA entitles LB to undertake such sales to third parties after September 2011.

·; KSK Energy Limited, 100% subsidiary of the Company, currently has 51.32% interest in KSKEV and upon acquisition of the 3.67% stake; the interest of the Company would go up to 54.99%.

·; The Company would continue to enjoy a right of first refusal on the 12.23% balance shareholding of LBIHMIL and its Affiliates in KSKEV, which are currently under lock up and LBIHMIL would continue to enjoy a board seat of KSKEV as long as Lehman and its Affiliates own more than 5% of KSKEV. The existing Voting Rights Agreement between KSK Energy Limited and LBIHMIL will automatically terminate upon LBIHMIL and its Affiliates owning less than 15% of the issued share capital of KSKEV.

The Supplementary Development Agreement demonstrates the Company's continual commitment to the business and growth of KSKEV as well as the desire of the Company and Lehman to ensure an orderly disposal of LBIHMIL's shares in KSKEV as part of their calibrated disengagement.

For further information please contact:

KSK Power Ventur plc +91 40 2355 9922

Mr. S. Kishore, Executive Director

Mr. K. A. Sastry, Executive Director

Arden Partners plc +44 (0)20 7614 5900

Richard Day / Adrian Trimmings

Financial Dynamics +44 (0)20 7269 7157

Jonathan Brill / Billy Clegg / Ed Westropp