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Mahindra CIE Automotive agreed to purchase a 26% share in Strongsun Solar in order to obtain power from two captive power projects in Maharashtra.
The Company has been taking various steps to optimize its power cost and increase the consumption of green energy at various power intensive plants of the Company. In line with the said efforts, the Company has agreed to subscribe equity share capital and invest an amount upto Rs. 33.50 million towards subscription of the equity share capital of Strongsun Solar Private Limited (Strongsun) aggregating to at least 26% of the post-issue paid-up capital of Strongsun. This will entitle the Company to source green energy from the two Captive Solar Power Generating Plants to be set up by Strongsun.
Strongsun will be setting up two captive generating plants of the capacity of 7 MWp and 3 MWp and supply captive solar power from these plants to Company’s factory of Foundry Division at Urse and Magnetics Products Division at Bhosari respectively.
In order to qualify as a captive consumer, the Company must hold atleast 26% of the total equity capital of the Power Generating Plants. Accordingly, the said investment is proposed to be made essentially to qualify as a captive consumer and thereby optimizing the power cost at the plants.
The proposed investment will be made as two tranches. The acquisition should be completed within nine months.