New Delhi: JSW Energy led by Sajjan Jindal will acquire a 1,000 megawatt (MW) power plant from his younger brother Naveen-led Jindal Steel and Power for Rs 6,500 crore.
As per the agreement, JSW will pay at least Rs 4,000 crore, excluding net current assets, and an additional Rs 2,500 crore if JSPL’s 1,000 mw power plant in Raigarh, Chhattisgarh secures a long term power purchase agreement.
JSPL expects the sale to help it to meet its liabilities while JSW will gain a foothold in coal-rich eastern India through the acquisition of the power plant in Chhattisgarh. JSPL has a debt of close to Rs 46,000 crore. “The adverse operating environment within power sector in the country is driving distress sales in the sector, and JSW Energy’s robust financial health coupled with a strong balance sheet is providing the company an opportunity to acquire quality power assets at reasonable valuations,” JSW said.
JSW would also extend Rs 500 crore as advance against interest. The sale is expected to be completed by June 30, 2018. The buyout by JSW comes close on the heels of its acquisition of Jaipr-akash’s 1,391 MW hydro-power plants. JSW is also said to be in talks to acquire Jaiprakash’s 500 MW thermal power plant in Madhya Pradesh and Monnet Ispat & Energy Ltd’s 1,050 MW power plant in Odisha. These buyout would help JSW to expand its power portfolio to a planned 11,500 MW.
Power companies are among the most debted in the country. Adani Power tops the list of private power producers with a debt of Rs 20,937.64 crore, followed by Jaiprakash Power with Rs 18,613.23 crore debt.
