JSW Energy in pact to buy 3 power plants of Jaiprakash Power

Written by PTI | New Delhi | Updated: Sep 26 2014, 03:38am hrs
Jaiprakash Power VenturesJaiprakash Power Ventures announced signing an initial pact to sell three projects to Sajjan Jindal-led JSW Energy. (Reuters)
A day after calling off its talks with Reliance Power, Jaiprakash Power Ventures today announced signing an initial pact to sell three projects with a total capacity of 1,891 MW to Sajjan Jindal-led JSW Energy.

"JSW Energy Limited (JSW) and Jaiprakash Power Ventures Limited (JPVL), today announced the signing of binding Memorandum of Understanding (MoU), for the 100 per cent acquisition by JSW of three operational plants of JPVL," JSW Energy said in a statement.

These plants area -- 300 MW Baspa-II Hydro Electric Plant, 1091 MW Karcham Wangtoo Hydro Electric Plant and 500 MW Bina Thermal Power Plant, it added.

On Wednesday, Reliance Power's talks to acquire Jaiprakash Power Ventures' three hydro power projects were called off following lack of clarity over capacity of the Karcham Wangtoo project.

Shares of Jaiprakash Power Ventures tanked nearly 14 per cent today on the BSE.

The two firms, who had been in talks for two months, announced the decision to call of the talks in separate press statements but did not give detailed reasons for it.

As per industry sources, the talks collapsed after Central Electricity Authority (CEA) issued show cause notice for alleged violation of techno-economic clearance conditions of the Karcham Wangtoo project, which had an approved capacity of 1,000 MW but actual capacity was built to 1,200 MW.

Jaiprakash group (Japyee) was looking to selling the hydro projects to cut its nearly Rs 12,000 crore debt.

In July, Reliance Power signed an initial agreement to acquire all the three hydroelectric power plants of JPVL.