JSW Energy cancels deal to buy JPVL’s Bina plant

The deal, now in the making for more than two years, was valued at an enterprise value of Rs 2,700 crore or Rs 5.4 crore per MW in July 2016, when JSW Energy agreed to acquire two thermal units of 250 MW each.

By: ENS Economic Bureau | New Delhi | Published: January 2, 2018 1:14:14 am
The Sajjan Jindal-promoted company had wanted to add to its capacity although analysts had pointed out at the time that the plant load factor at Bina was relatively low.

Power producer JSW Energy has decided not to go ahead with the proposed acquisition of the 500 megawatt Bina Thermal Power Plant from Jaiprakash Power Ventures, the company said in a filing to the stock exchanges on Monday.

The deal, now in the making for more than two years, was valued at an enterprise value of Rs 2,700 crore or Rs 5.4 crore per MW in July 2016, when JSW Energy agreed to acquire two thermal units of 250 MW each.

The transaction had already been pushed back once from May 31, 2017 till December 31, 2017. The Sajjan Jindal-promoted company had wanted to add to its capacity although analysts had pointed out at the time that the plant load factor at Bina was relatively low.

In fact, soon after JSW Energy expressed interest in buying the Bina units, lenders to JP Power initiated an SDR (strategic debt restructuring) scheme on July 26, 2016. Analysts had noted at the time Bina had a debt of close to Rs 2,000 crore as of March, 2015 and an equity of around `1,005 crore. Bankers to JPVL include State Bank of India (SBI) and its subsidiaries, Bank of India, Canara Bank, Punjab National Bank (PNB), IDBI Bank, ICICI Bank, UCO Bank, Union Bank of India, Central Bank of India among others.

JSW Energy and JP Power remained unavailable for comments on the development.

In FY17, JSW Energy reported revenues of Rs 8,264 crore, a fall of 16 per cent over FY16. The consolidated profits came in at Rs 629 crore, down 57 per cent.

In September 2015, JSW Energy concluded the acquisition of two hydropower projects — Baspa II and Karcham Wangtoo from JP Power for an asset value of Rs 9,275 crore. With the Bina buyout, company had planned to take its overall capacity to more than 5,000 MW.

After its annual general meeting in July last year, Sajjan Jindal, chairman JSW Group had said JSW Energy was in consolidation mode and would look at acquiring suitable assets. The company had announced plans to raise up to Rs 12,500 crore via debt and equity during the financial year 2017-18.

The company’s board had passed an enabling resolution to raise around Rs 5,000 crore through secured and unsecured non-convertible debentures on a private placement basis, and another up to Rs 7,500 crore via equity through qualified institutional placements and other equity options. FE

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