Exit Reliance Power, enter JSW Energy: Sajjan Jindal acquires 3 of Jaypee's power projects

Sajjan Jindal-led JSW Energy on Thursday said it will acquirethree power projects of Jaiprakash Power Ventures. The deal came a day after talks between Jaypee group and Anil Ambani’s Reliance Power were called off to buy out the same assets.

JSW Energy has signed an agreement to acquire three power plants - the Bina, Bapsa and Karcham projects–of 1,891 MW capacity from the Jaypee group, according to CNBC-TV18.

Sajjan Jindal toldthe channel, “We are ready to close the deal and are waiting for regulatory approvals.” Although FirstBiz couldn’t ascertain the value of the deal, reports said it could be anywhere between Rs 10,000 crore to Rs 12,000 crore. Jindal did not divulge the deal size, however he said, “…thenumbers will be derivative once details worked out.”

As regards the terms of the deal, Jindal told the channel that the deal will be completed by the end of October or mid-November. Jindalsaid though JSW has sufficient equity but will have to raisethe debt component.

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JPVL has a generation base of 1,700 MW (Megawatts) hydro power (1,000 MW Karcham Wangtoo, 300 MW Baspa II, and 400 MW Vishnu Prayag) and 1,160 MW thermal power, including 500 MW Bina thermal project and 660 MW Nigrie thermal power project.

On Wednesday, Reliance Power and the Jaypee Group announced that they had failed to close a deal that had been months in the making. Following this, the shares of JP power have plunged as much as 21 percent on BSE.

Industry sources said talks collapsed after Central Electricity Authority (CEA) issued show cause notice for alleged violation of techno-economic clearance conditions of the Karcham Wangtoo project, which had an approved capacity of 1,000 MW but actual capacity was built to 1,200 MW.

However, Jaiprakash Power, in a statement said the deal fell through, “for reasons not attributable to any regulatory uncertainties but due to difference of commercial aspects.”

“The company was determined to take steps in the larger interest of the shareholders in the prevailing economic sentiment in the country,” Jaypee Group Chairman Manoj Gaur said in the statement.

The Economic Times today reported that JSW could enter the fray and make a bid for the power projects.

(With inputs from PTI)