The Hindu Business Line : NTPC-TELK joint venture to be launched on June 23

The State Government will hold 51 per cent stake in the company, while NTPC will hold 44 per cent. `Mutually beneficial' tie-up to compete with MNCs

Kochi June 19 NTPC will enter the transformer manufacturing sector by formally becoming a joint venture partner with the State-owned Transformers and Electricals Kerala Ltd (TELK) on June 23.

The Chief Minister, Mr V.S.Achuthanandan, will hand over the final agreement of the joint venture at a function to be held at the TELK premises on Saturday, a senior official told Business Line.

He added that NTPC would appoint the Managing Director of the company, while the Principal Secretary of the State Industries Department would be the Chairman.

NTPC will pump in Rs 190 crore for modernisation and expansion of the unit for manufacturing high-end transformers and mobile transformer repairing units.

The State Government will hold 51 per cent stake in the company, while NTPC will hold 44 per cent.

Japanese major Hitachi will retain four per cent stake in the company. Sixty per cent of NTPC's investment will be as loan.

The official also said that SBI Caps had done the asset and machinery valuation. Such a joint venture will be beneficial to both the parties, he added.

NTPC, which has a lot of captive requirement, will be able to curtail the lead-time in sourcing capital equipment.

Besides, TELK is the only PSU that manufactures high-quality transformers of 10 MVA and above capacity in the country, he added.

Other suppliers are by and large multinational companies.

Hence, there would be a cost advantage when the products are manufactured at its own unit.

The joint venture will compete with BHEL and MNCs in the domestic market by manufacturing high-end products, he said.

Apart from this, NTPC often needs repairing of transformers in its national network; this is currently done at far-flung facilities, which is highly expensive.

The joint venture would help it have mobile repairing units, which would result in substantial savings, he said.

More Stories on : Alliances & Joint Ventures | Power | Diversification | Kerala

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