JSW acquires two hydro power projects for Rs 9,700 crore

JSW Energy, controlled by billionaire Sajjan Jindal, has bought two hydro power projects of debt-ridden Jaiprakash Power Ventures Ltd (JPVL) in Himachal Pradesh, for Rs 9,700 crore.

The two projects bought by JSW Energy are 300 MW Baspa-II and 1,091 MW Karcham Wangtoo.

"The company has concluded the acquisition of 100% of the securities of Himachal Baspa Power Company Ltd. (HBPCL) which has two operating hydro power assets -300 MW Baspa-II Hydro electric project (HEP) and 1,091 MW Karcham Wangtoo HEP," JSW Energy said in a statement.

Besides, JSW Energy has also entered into a binding agreement with JPVL to acquire 500 MW Bina thermal power plant in Madhya Pradesh.

"JPVL has also entered into a binding Memorandum of understanding (MoU) with JSW Energy for sale of 100% stake of its 500 MW Bina Thermal Power Plant to JSW Energy, " JPVL said in a statement.

Besides, JPVL has concluded the sale of securities of HBPCL to JSW Energy at an enterprise value of Rs 9,700 crore, including Rs 300 crore which is payable upon receipt of certain additional consents and approvals related to the Karcham Wangtoo HEP.

"The acquisition helps in diversifying the power generation portfolio with high hydro power assets, besides increasing the share of long-term PPA (power purchase agreement) in our basket," JSW Energy Chairman and Managing Director Sajjan Jindal said in a statement.

"We plan to acquire Bina Power project, that will further strengthen the business model of JSW Energy and also enhance our capacity to over 5,000 MW," he said. 

The developments take JSW Energy a step closer towards achieving its aim of having over 10,000 MW power generation capacity by 2025, the company said.

"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, another notable player in the power sector," Jaypee Group Chairman Manoj Gaur said in the statement.

He also said that the closure evidenced Jaypee Group's focus of reducing its debt and emerging as a leaner and more profitable corporate.
 

SBI Capital Markets Ltd and ICICI Securities Ltd were the financial advisors to the company for the transaction while Vaish Associates were the legal advisors and Bansi S Mehta & Company were the tax and structuring advisors for the transaction.

JPVL post this divestment will continue to own 400 MW Vishnuprayag HEP, 500 MW Bina Thermal Power Plant and 1320 MW Nigrie Super Thermal Power Plant. It will also continue to have 74% stake in JPL. All these plants are operational.

Besides, 1980 MW Bara Thermal Power Plant being set up by its subsidiary PPGCL will also be owned by JPVL. The TPP is expected to achieve commercial operation date (COD) in the current financial year.

Shares of JSW Energy were trading at Rs 74.30 apiece, up 9.67% from the previous close.

Shares of JPVL were trading at Rs 5.90, up 5.92% from the previous close.