Lehman JV Re-organisation

28 Jan 2008 07:01

KSK Power Ventur PLC28 January 2008 For immediate release 28 January 2008 KSK Power Ventur plc ("KSK plc" or "the Company") Re-organisation of Lehman JV and employee share subscription KSK Power Ventur plc (AIM: KSK), the power project development company withinterests in multiple power plants across India, is pleased to announce the re-organisation of the Lehman JV arrangements with LB India Holdings Mauritius I Limited ("Lehman"). The Lehman JV was established to invest in captive or otherpower generation projects and has successfully invested in a range of suchinitiatives. The joint venture company established under these arrangements was KSKElectricity Financing India Private Limited ("KSKFIPL"), in which KSK, throughits wholly owned subsidiaries, KSK Energy Limited Mauritius ("KEL") and KSKEnergy Ventures Private Limited ("KSKEV"), held 10% of the equity and Lehmanthe remaining 90%. Under the re-organisation, Lehman is selling its entire stake in KSKFIPL toKSKEV and is subscribing for a 33.42% stake in KSKEV with another investorsubscribing for 1.58% in KSKEV, with KSKEV to pay net consideration of US$ 85million. Approximately US $ 100 million will be raised by KSK plc, through a subscriptionof new shares by various employees, further details of which will be announcedseparately. Consequently, KSK, through KEL, will hold 65% of KSKEV, which in turn will hold100% of KSKFIPL. In recognition of KEL's outstanding "efforts and the value creation for theshareholders of KEFIPL to date" Lehman is paying a Value Development fee ofUS$7.6 million to KEL. The broad details of re-organisation are as follows: 1. The preference shares in KSKEV held by KEL, have been converted into equity shares of KSKEV at par and a bonus issue of equity shares has been made. 2. KEL and its 100% subsidiary KSK Energy Company Private Limited (KSKECPL), has entered into Development Agreement with multiple down line SPVs of KSKFIPL. 3. KSKEV's interest in the legacy SPV projects, being RVK, Athena, Kasargod and Coromandel, are being transferred to KSKECPL along with the Small Is Beautiful Fund investments and management. 4. KEL and Lehman have entered into a share subscription agreement and a voting rights agreement. 5. Under a share purchase agreement, KSKEV has acquired all Lehman's shares in KSKFIPL. For the year ended 31st March,2007, the profit before tax in KSKEV was Rs.159million and it had gross assets of Rs. 3.14 billion. For the year ended 31stMarch,2007, the loss before tax in KSKFIPL was Rs.9.02 million and it had gross assets of Rs. 284 million. Commenting on this re-organisation and employee subscription, S. Kishore,Executive Director of KSK Power Ventur plc said: "These are significant and very positive steps in the overall development of theKSK Group. They will allow us to fully focus on the various services we canoffer as well as more clearly identify the value in our investments in ourvarious power plant projects. We continue to explore all opportunities to helpmaximise shareholder value, including any potential Indian IPO of our SPVinterests. .We presently have a pipeline of over 7200 MW, with further progressbeing made. Good progress has also been made with respect to financialarrangements. We are delighted at this development in our Lehman relationshipand are looking forward to continuing our value creation efforts. I am also pleased that we are able to extend KSK plc share ownership among ouremployees through the anticipated subscription scheme.We all very muchappreciate how they have contributed to the overall growth of KSK and all our operations ". For further information, please contact KSK Power Ventur plc +91-40-23559922S. Kishore, Executive DirectorK.A. Sastry, Executive Director Arden Partners plc +44 (0)20 7398 1632Richard DayAdrian Trimmings Buchanan Communications Limited +44 (0) 20 7466 5000Mark EdwardsBen Willey See our website on: www.ksk.co.in This information is provided by RNS The company news service from the London Stock Exchange