Energetic deal

Thermax, the energy and environment solutions company based in Poona, has entered into a joint venture (JV) agreement with American firm Babcock and Wilcox (B&W) for the manufacture of supercritical boilers for the Indian power sector. Thermax will own 51 percent and B&W 49 percent stake. The initial investment in the JV would be about Rs 700 crore, with a debt-equity ratio of 1:1. Thermax’s equity contribution would be in the region of Rs 175 crore.

Venturing jointly (from left): Thermax managing director M. S. Unnikrishnan, chairperson Meher Pudumjee, Richard Killion, president and Randal Data, vice president, Babcock and Wilcox Power Generation Group

A greenfield plant with a capacity of 3,000 mw per annum in phase-1 would be set up and the partners have shortlisted three locations, the company announced in March. Commissioning would take 18-24 months from the day the location is finalized. Thermax has been associated with the $ 2.8 billion B&W for over 20 years in the sphere of industrial boilers. In 2008, Thermax had inked a technology transfer agreement with B&W to make sub critical boilers and had been making boilers up to 300 mw. Supercritical technology is more cost efficient and causes less harm to the environment, according to company sources.

In February, Thermax had reached an out-of-court settlement with Purolite International, a US company with which it had a five-year dispute over trade secrets (pertaining to its ion exchange resin business in the US). Under the terms of the settlement, both the companies are co-owners in perpetuity of the disputed trade secrets. Thermax will pay Purolite four installments of $ 9.5 million each in April, July, October and December, totaling around Rs 178 crore.

"Our options were either to continue with the defense at the jury trial and beyond by way of filing an appeal should the trial be unfavorable, or resolve the matter out-of-court,” Thermax chairperson Meher Pudumjee stated. "We want to focus on the future rather than on the past. That only saps people’s energy,” director Anu Aga was quoted in The Economic Times, February 25, 2010.