China's Shanghai Electric Group in talks to buy upto 74% stake in eight power projects of ILFS.

ILFS Energy Development Co, which is developing coal- and gas-based power plants with a capacity of about 7,500 MW across the country, has begun talks with Shanghai Electric Group to sell a stake of up to 74% in eight projects, starting with its 4,000 MW power plant at Cuddalore district in Tamil Nadu, a person with direct knowledge of the development said.

'We are in discussions with various strategic investors including Shanghai Electric to sell a majority stake in our special purpose vehicles created to build 7,500 MW in different states,' the person said.

'The sale will be in various stages starting with 26% and will later end up selling up to 74% with the parent keeping the rest 26%.' The talks are project-specific and will depend on how the ongoing dis-cussions conclude, the person said. Apart from unlocking value, ILFS also wants a strategic investor which can execute engineering and procurement work as well as operations and maintenance once the plants are completed.

The Cuddalore plant, of which the first phase of 600 MW will start before August, needs an investment of Rs. 20,000 crore with Rs. 6,000 crore as equity. A 74% stake could fetch the company a premium on top of this Rs. 6,000 crore.

ET