 "Reliance Power signs pact to buy out Jaypee group's hydroelectric portfolio")
The race to acquire debt-ridden Jaypee Group’s hydroelectric projects ended on Sunday with Anil Ambani’s Reliance Power outbidding the likes of Gautam Adani and Sajjan Jindal, according to news reports.
The Times of India and the Financial Express both report that Ambani’s Reliance Power and Jaypee Group’s Jaiprakash Power Ventures have agreed to the sale of the latter’s three hyrdroelectric projects,worth over Rs 10,000 crore.The financial details of the deal, however, are not known yet.
According to the ToI report , the deal, once it fructifies, will make Reliance Power the largest hydroelectricity manufacturer in the private sector, and one of the largest power companies in the country with an operating capacity of 7,800 MW by FY15. Reliance Power’s other hydroelectric developments includeprojects generating over 5000 MW in Arunachal Pradesh, Himachal Pradesh and Uttarakhand.
The FE reports that the Jaypee Group will use the funds to pare their outstanding debts, which estimates peg at approximately Rs 5, 800 crore.
According to a press release which both papers had access to, the three hydroelectric plants acquired by Ambani are - the Karcham Wangtoo unit in Himachal Pradesh (1,091 MW), the Bapsa plant also in HP (300 MW) and the Vishnuprayag plant (400 MW) in Uttarakhand.
_ToI_reports that the deal is the largest M&A in India’s infrastructure sector, when assets acquired and generation capacity are considered.
Reliance Power told CNBC-TV18 that the deal is expected to close within the next 6 months. Reliance Power said there is no issuance of equity at the company level and the deal will be EPS & RoE accretive from day 1 for company.
Last week, media had reported that the Au Dhabi National Electric Company (TAQA) pulled out of a $1.6 billion deal to buy two Jaypee hydroelectric unitsbecause of “a change in strategy”.
In March, TAQA had said a consortium led by it had agreed to buy the two power plants from Jaiprakash Power Ventures.The consortium was to spend $616 million on equity in the plants, and in addition take over their non-recourse project debt, bringing the total enterprise value to around $1.6 billion, a TAQA spokesman said at the time.
Subsequently, there were also news that industrialists Gautam Adani and Sajjan Jindal were interested in the hydroelectricity portfolio. The Adani dealwas estimated to be worth over Rs 11,000 crore,including debt component, sources said at the time.
It was stated thatAdani Group Chairman Gautam Adani had already held talks with Jaypee Group Executive Chairman ManojGaur in this regard.
With inputs from agencies