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Private equity firms acquire 44 per cent in Asian Genco

A consortium led by Morgan Stanley Infrastructure has acquired a 44 per cent stake in power generation and engineering services firm Asian Genco for USD425m.

Appleby acted as the Mauritius legal counsel to what is the biggest private equity transaction in India in almost two years.

The deal, which also included Norwest Venture Partners, General Atlantic, Goldman Sachs Investment Management and Everstone Capital, is also the biggest private equity transaction in the country’s power sector and the first one of over USD300m since 2008.

The investment will be effected through convertible instruments that will give the investors around 44 per cent in Asian Genco, a Singapore-based holding company that owns many hydro, thermal and non-conventional power generation assets in India, when converted into equity.

The Asian Genco deal comes in the wake of a raft of new power sector firms raising funds to set up generation units to feed the voracious demand for electricity in the world’s second-fastest growing economy.

Asian Genco owns a power generation capacity of over 4,000 mw that is under development riding on an estimated capital outlay of USD4.5bn. The consortium’s investment will help Asian Genco complete its current pipeline of projects and to develop new ones.

The company is developing a project called Teesta III, which is among the largest hydro projects in the Indian private sector, with a capacity of 1,200 mw and a coal-fired supercritical thermal project in Andhra Pradesh with a 1,320 mw capacity.

Appleby, Davis Polk, JSA and Bangalore private equity boutique Lexygen jointly led the due diligence, structuring, negotiations and documentation advice for the consortium.

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