Avantha group firm Crompton Greaves said on Monday that it had agreed to sell its transmission and distribution business outside India to First Reserve International, a US Private Equity fund, for an enterprise value of €115 million.

Likewise, GMR Infrastructure, with total debts of over ₹43,000 crore, said it was selling a 30 per cent stake in its subsidiary GMR Energy to Malaysia’s Tenaga Nasional Berhad for ₹2,000 crore ( see accompanying story ).

Debt reduction

The sale by Crompton Greaves will help lower its debt and enable it to focus on its faster-growing Indian businesses. Its consolidated debt stood at ₹2,744 crore in FY15. Earlier, Crompton Greaves had announced the de-merger of its consumer products business into a wholly-owned subsidiary, Crompton Greaves Consumer Electricals. In October 2015, the company sold its Canadian Power Transformer business to PTI Holdings Corp.

“The company along with its subsidiaries CG International BV and CG International Holdings Singapore PTE Ltd has signed a share purchase agreement with Pauwels Spaco Ltd — an SPV of First Reserve for the acquisition,” Crompton Greaves said in a stock exchange filing on Monday.

It further said: “The SPV envisages completion of the transaction by October 31, 2016, subject to shareholder and regulatory approvals.”

The company is also selling its other remaining international B2B businesses, for which it has appointed investment bankers to identify potential buyers.

However, the India business, too, is fraught with challenges. “The retained India T&D business has large technology gaps raising concerns on future growth and a shrinking addressable market. …the India industrials division suffers from low orders,” JM Financial had said in an earlier report.

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