It was reported that the Himachal Pradesh government had expressed reservations on the JPVL-TAQA deal owing to certain snags in the memorandum of understanding and deviations in the plant. However, analysts quoting Reliance Power said no major external approvals are required, which could pose a risk to the deal.
Jaiprakash Associates had a consolidated net debt of around R58,911 crore as on March 31, excluding proceeds from sale of its cement plans in Gujarat and two hydropower projects. The Jaypee Group has been selling assets since March 2013 in an effort to pare its debt. In September 2013, it sold two of its cement facilities in Gujarat to the Aditya Birla Groups UltraTech Cement for an enterprise value of R3,800 crore. In May 2013, it sold a 300-acre land parcel in Noida to realty firm Gaursons India for R1,500 crore. In March, it sold a controlling interest in another of its cement plants in Bokaro to the Dalmia Bharat Group for R851 crore.
The deal with R-Power will, in fact, yield more funds for Jaiprakash Associates than the one with TAQA, which was only for two power plants.
Jaiprakash Powers shares rose 3.17% to close at R19.55 per share, and Jaiprakash Associates gained 2.95% at R61.10 per share.