Debt-laden Jaypee Group on Tuesday concluded the transaction to sell two of its hydropower projects to Sajjan Jindal's JSW Energy...
Debt-laden Jaypee Group on Tuesday concluded the transaction to sell two of its hydropower projects to Sajjan Jindal’s JSW Energy at an enterprise value of Rs 9,700 crore and also entered into a binding memorandum of understanding with the company to sell its 500 MW Bina thermal power plant in Madhya Pradesh.
While the two sides did not disclose the value of the deal relating to the sale of the Bina project, reports suggest it could be for around Rs 3,500 crore.
“JSW Energy has entered into a binding MoU with Jaiprakash Power Ventures to acquire 100% stake in the 500 MW Bina thermal power plant located in the Sagar district of Madhya Pradesh,” the company said.
The conclusion of the deal, which was announced in November last year, relates to Jaypee’s two hydropower plants — the 300 MW Baspa-II and 1,091 MW Karcham Wangtoo projects, both in Himachal Pradesh.
The 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.
In FY15, the net loss of JP Associates, the parent firm of Jaiprakash Power Ventures, stood at Rs 1109.77 crore from a net profit of Rs 413 crore last year. During April-June, the company posted a loss of Rs 464.99 crore. JP Associates’ standalone net debt at the end of FY15 was at Rs 21,864.21 crore.
To improve its weakening financial position and reduce debt, Jaiprakash Associates has been selling some of its subsidiaries and exiting some other ventures. For instance, in April it sold its 1.5 MTPA cement grinding unit at Panipat, Haryana, to Shree Cement, for Rs 358.22 crore.
That deal followed another transaction with Ultratech Cement in January, when the company transferred two of its cement plants with an aggregate grinding capacity of 4.9 MTPA capacity and a 180 MW thermal power plant for Rs 4,537.90 crore in non-convertible debentures.
It also got Rs 10 lakh worth of non-convertible cumulative redeemable debentures and transferred its Rs 787 crore debt to Ultratech Cement, as part of that transaction.
On Tuesday, shares of JPVL closed up 5% at Rs 5.85 while shares of JSW Energy closed up 9.6% at Rs 74.75 on the BSE.