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Embattled Financial Technologies India Ltd (FTIL) has signed a new agreement with a group of investors to sell a 16.6 per cent stake in Indian Energy Exchange (IEX) for ₹357 crore. FTIL owns a 25.64 per cent stake in IEX.
Last November, FTIL entered into a share-sale agreement with a consortium of investors led by Chennai-based private equity firm TVS Capital Funds to sell the entire stake for about ₹577 crore, valuing IEX at ₹2,250 crore.
But the deal was called off due to non-fulfilment of certain contract terms, and the Economic Offences Wing of Mumbai police raising an objection in the High Court.
On June 12, the Court allowed the company to sell the stake provided it deposits ₹84 crore within four weeks of deal. Following this, the company signed a new agreement to sell the stake.
“We have entered into a new share purchase agreement with DCB Power Ventures Ltd, Kiran Vyapar Ltd, Agri Power and Engineering Solutions Pvt Ltd, Aditya Birla Capital Advisors Pvt Ltd (for and on behalf of Aditya Birla Trustee Company Private Ltd, trustees to the Aditya Birla private Equity Fund I and Aditya Birla Pvt Equity Sunrise Fund) for sale of 16.6 per cent stake for ₹357.06 crore,” FTIL said in a statement on Friday.
The new deal values IEX at about ₹2,150 crore.
The remaining 9 per cent stake will be kept in an escrow account and sold in due course, said the company.
The NSEL effectIn May 2014, the Central Electricity Regulatory Commission had directed the company to sell its entire stake in the power exchange after it was declared not “fit and proper” to hold stake in exchanges by various regulators, including SEBI and the FMC.
In 2013, FTIL group company NSEL had failed to settle trades worth ₹5,600 crore on its platform, sparking a crisis that saw the company’s fortunes go into a tailspin.
Interestingly, the new agreement is also subject to fulfilment of certain conditions, including buyout of FTIL software application and other technology for IEX use. It also needs regulators’ approvals. The deal is expected to be closed within 60 days.
Last March, FTIL sold a part of its stake in IEX to Golden Oak (Mauritius), after which its holding dropped to 25.64 per cent.
IEX offers a platform for online electricity trading, and clearing and settlement operations. It has over 800 private generators and more than 2,800 open access consumers leveraging the exchange platform to manage their power requirements.
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