Power major National Thermal Power Corporation (NTPC) is to acquire 44 per cent stake in Kerala state public sector firm Transformers and Electricals Kerala Limited (TELK) for a joint venture to supply transformers to it, an official said on Thursday.
The agreement will be signed on Saturday.
"This is indeed a historic occasion because this is going to be a strong message to all that even 'Navaratna' companies look forward to tie up with Kerala public sector companies. The agreement would be inked between NTPC chairman and principal secretary Industry department T Balakrishnan in the presence of Chief Minister VS Achuthanandan," state Industries Minister Elamaram Kareem told reporters in Thiruvananthapuram on Thursday.
TELK, based in Ernakulam, has been manufacturing transformers.
"In the next three years Rs 1.9 billion would be invested in TELK. Of this, Rs 1 billion would be invested in the first year itself. NTPC, by paying Rs 310 million would acquire 44 per cent stake in the firm, bringing down the state government's share to 51 per cent. The rest is held by Hitachi and a few other companies," said PH Kurian, director of the industries department.
Of the 110-acre campus near Kochi where TELK is situated, the government has taken 51 acres back. The rest 59 acres and the existing buildings would be handed over to the new joint venture.
"The Kerala government, which will receive Rs 310 million from NTPC, would in the next six months re-invest this money in the new joint venture. The name of the company would continue to remain as TELK," added Kurian.