JSW Energy buys Jaiprakash Power’s two hydropower projects

Photo sourced from JP PowerVentures website

Jaiprakash Power Ventures Ltd said on Tuesday that it has concluded the sale of two hydropower projects to JSW Energy Ltd, at a deal valued less than what was originally agreed.

Jaiprakash Power has also signed a binding memorandum of understanding (MoU) with JSW Energy for the sale of its 500 megawatt (MW) Bina thermal power plant, the company said.

A separate press release issued by JSW Energy said the deal to buy hydropower projects (Baspa II and Karcham Wangtoo) from Jaiprakash Power has been concluded for an asset value of Rs.9,275 crore. An additional consideration of Rs.300 crore may become payable upon receipt of certain “additional consents and approvals related to Karcham Wangtoo HEP on or before 6 September 2020”, the company said.

In November, the two companies had pegged the deal value at Rs.9,700 crore.

In its notice to the stock exchanges, Jaiprakash Power said the deal value had been reduced by “mutually agreed adjustments”.

The two hydropower projects have been sold to JSW Energy through a special purpose vehicle (SPV) Himachal Baspa Power Co. Ltd.

“This is the largest transaction in the power sector in the country and two of JPVL’s most prized assets are going to JSW Energy Ltd, another notable player in the power sector,” said Manoj Gaur, chairman, Jaypee Group, in a statement.

Separately, the two companies said that a binding MoU has been signed for JSW Energy to acquire 100% stake in the 500 MW Bina thermal power plant located in Madhya Pradesh.

Analysts estimate the Bina plant’s project cost at Rs.3,100-3,500 crore, Mint reported on Monday.

The value of the deal will, however, depend on the final power purchase agreement (PPA) the developer strikes with customers for the electricity the project generates. A PPA is in place only for about 70% of the power generation; a purchase agreement is yet to be tied up for the remaining 30% capacity, the two bankers involved in the deal discussions said on Monday. Assured coal supply is also available only for the 70% for which a PPA has already been sewn up.

Both deals are crucial for the Jaiprakash Group which has significant levels of debt on its books and has been trying to sell assets to reduce debt. As of March 2015, the group had a total debt Rs.63,999.15 crore, according to data from corporate database Capitaline.

At 12:51pm, JSW Energy’s shares were up 10% to Rs.74.55 while those of Jaiprakash Power were up 6.8% to Rs.5.95 on BSE.

(This article was first published on Livemint.com)

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.