Abu Dhabi National Energy Company (TAQA) led consortium will acquire Jaiprakash Power Ventures' two hydroelectric power plants for about Rs. 10,000 crore ($ 1.6 billion), TAQA said on Sunday.
"The total enterprise value of the two assets is approx $1.6 billion (approx Rs. 10,000 crore). The amount of equity being invested by the consortium is approx $616 million (Rs 3,820 crore)... The remainder is primarily non-recourse project debt," a TAQA spokesperson said in an e-mailed reply to a PTI query.
Earlier, TAQA had said in a statement that through a consortium it will acquire Jaiprakash Power Ventures' two hydro-electric power plant, Baspa Stage II and Karcham Wangtoo, having 1,391 MW capacity.
"The equity invested by the consortium in the acquisition of the two hydroelectric plants will amount to approximately Rs. 3,820 crore ($616 million, based on March 1, 2014 foreign exchange rate), of which 51% is from TAQA.
"The consortium will also acquire the assets' non-recourse project debt," said TAQA, which is the brand name of Abu Dhabi National Energy Company.
TAQA holds 51% stake in the consortium and will have control of operations and management of both the plants under the proposed deal, it said.
Its consortium partners include one of Canada's largest institutional investors, whose name was not disclosed (39% stake) and IDFC Alternatives' India Infrastructure Fund II (10% stake).
The two plants have a combined power generation capacity of 1,391 MW and are located in Kinnaur district, Himachal Pradesh, within two km of each other. They share support facilities and use run-of-the-river technology to convert natural water flow to electricity, eliminating the need for a reservoir.
The plants are 35 km from the Sorang hydroelectric plant, in which TAQA acquired stake last year.
According to TAQA, the acquisition will make it the largest private operator of hydroelectric plants in India. Post completion of the deal, its gross operational power generation capacity in India will rise to 1,741 MW, comprising of 3 hydel power and one lignite plants.
TAQA's Executive Officer and Head of Global Power & Water Frank Perez said: "India's economic growth depends on having ample and reliable energy supply. TAQA is pleased to add these two high quality hydro power assets to our growing India business and to support India's economic growth." The acquisition is expected to close in 2014 and is subject to regulatory and third party approvals, TAQA said.
Jaiprakash Power Ventures Ltd is a subsidiary of Indian infrastructure conglomerate Jaypee Group. In recent times, the Jaypee group has been on a debt-pruning spree.
In September 2013, it had sold a cement plant in Gujarat to Aditya Birla group's UltraTech having an enterprise value of Rs. 3,800 crore. On Friday, shares of Jaiprakash Power Ventures' had shot up 12.26 per cent to close at Rs. 16.57 a piece on the BSE after the company announced that its Board will meet on Saturday to consider ways to reduce debt and unlock shareholders' value.
The company is yet to announce the decisions taken by the Board yesterday.
For the quarter ended December, 2013, Jaiprakash Power Ventures' had reported net loss of Rs. 153 crore. For 9 months of the current fiscal, its net profit has gone down by over 57 per cent to Rs. 191.71 crore.
Its total borrowings, as on September, 2013, stood at Rs. 16,754 crore.
TAQA said that its investment decision follows the signing of the UAE-India Bilateral Investment Promotion and Protection Agreement in December, 2013 and a commitment made by the UAE to invest USD 2 billion in India's infrastructure sector.
The UAE had made this commitment during the first meeting of the UAE-India High Level Joint Task Force on Investments which was held in Abu Dhabi last month.
"This investment will be recognised at the second meeting of the UAE-India High Level Joint Task Force in Mumbai on March 3, 2014 co-chaired by Sheikh Hamed bin Zayed Al Nahyan, Chairman of the Abu Dhabi Crown Prince Court, and Anand Sharma, India's Minister of Commerce and Industry," the company said.
TAQA, meaning energy in Arabic, is the brand name of Abu Dhabi National Energy Company PJSC, which has operations across the world.
The IDFC Alternatives Ltd is an advisor and investment manager of IDFC sponsored funds across private equity, infrastructure and real estate having assets under management of about $ 2.8 billion.