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JSW Energy agrees R9,700 crore deal for Jaiprakash hydro assets

The company aims to establish a power generation capacity of 12,000 MW by the year 2025.

By: ENS Economic Bureau | Mumbai | Published: November 17, 2014 2:15:20 am

JSW Energy will be paying Rs 9,700 crore for the two hydro electric power assets that it had agreed to buy from the Jaypee Group in September, the company said on Sunday.

JSW Energy said that the two assets — the 300 MW Baspa II power project and the 1,091 MW Karcham Wangtoo project, both in Himachal Pradesh — will be transferred by Jaiprakash Power Ventures (JPVL) into a new entity called Himachal Baspa Power. JSW Energy would then acquire the entire equity holding in the new company from JPVL and other shareholders.

While announcing the deal in September, JSW Energy had also mentioned that it was buying Jaypee Group’s 500 MW thermal power plant in Bina. However, it found no mention in company’s statement on Sunday.

JSW Energy also didn’t mention how it proposed to fund the deal and whether the consideration to be paid to the Jaypee Group would be net of the debt associated with these assets.

Acquisition of these two assets will make JSW Energy the largest hydroelectric power producer in the country with an operating portfolio of 1,300 MW.

“Post-acquisition, aggregate installed and operational power generation capacity of JSW Energy will enhanced to 4,531 MW,” the company said, adding that the present acquisition was expected to yield an immediate cash flow and enhance consolidated profitability.

The two project had a combined turnover of Rs 1,561.50 crore in 2013-14, an increase of 29 per cent over what the assets had earned in 2011-12. JSW Energy said that the acquisition was a strategic fit to the company since it was also setting up its own 2,450 MW hydro project in the same state.

“This is an attractive deal for our shareholders, as it is expected to be earnings accretive on closure,” JSW Energy’s chairman Sajjan Jindal said. “Our strategy is to increase the capacity manifold and create synergies through a mix of organic and inorganic opportunities.”

The company aims to establish a power generation capacity of 12,000 MW by the year 2025. FE

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