GMR has signed a share purchase agreement with FPM Power Holdings to sell 70% stake in a gas-fired power project in Singapore for S$660m ($532m).

The 800MW natural gas fuelled power plant on Jurong Island, Singapor is being constructed, operated and maintained by GMR Energy (GMRE).

The remaining 30% stake in GMRE is held by Petronas, which will continue to invest in the project.

FPM Power will invest S$60m ($64m) to complete the gas-fired project, which is 96% complete and expected to start operations by the end of 2013.

The company said the sale will translate to an enterprise value of S$1.61bn ($1.29bn) on completion of the project.

GMR chairman G M Rao said that the project is on schedule and within the budget.

"The divestment is the off-shoot of the Group’s well thought out strategy of an Asset Right- Asset Light and Cosh Flow based model that the Group has embarked in the recent times," Rao added.

"The Cosh flaws will help GMR Energy to focus on our Domestic Energy Business & accelerate ongoing Projects totaling to 5790MW."

The transaction is subject to approval from project finance lenders to GMRE and is expected to close by end of March 2013.