Essar's Mahan-Sipat project will be acquired by Adani Transmission.
An operating 400 kV inter-state line from Mahan in Madhya Pradesh to Sipat pooling substation in Chhattisgarh is the target asset of the deal between Adani Transmission Ltd and Essar Power Ltd.
AHMEDABAD: Adani Transmission Ltd (ATL) and Essar Power Ltd (EPL) have inked definitive agreements for the acquisition of Essar Power Transmission Ltd's 673 circuit kilometre (ckt km) operational inter-state transmission project (EPTCL).
The transaction's enterprise value is Rs. 1,913 crore.
"ATL's foothold in central India will be strengthened with the acquisition of Essar's transmission asset." With this acquisition, ATL is on track to meet its 20,000 ckt kms target ahead of schedule. We're still at the forefront of grid stability, and we're here to help sustainable, reliable, and affordable energy solutions while creating long term sustainable value for our stakeholders,” Anil Sardana, MD & CEO, Adani Transmission Ltd said in a media statement.
The target asset is an operational 400 kV inter-state transmission line linking Mahan in Madhya Pradesh to Sipat pooling substation in Chhattisgarh with line length of 673 ckt km. The project operates under the CERC regulated return framework and was commissioned on September 22, 2018. The proposed transaction will be executed through transaction steps which shall be subject to necessary regulatory approvals and other consents.
The acquisition is in line with ATL’s value added growth strategy through organic as well as inorganic growth opportunities, according to ATL media release. With this acquisition, the cumulative network of ATL will reach 19,468 ckt km, out of which 14,952 ckt km is operational and 4,516 ckt km is under various stages of execution, it said.
“This is a part of a deleveraging strategy following which Essar has repaid over ₹1,80,000 crore to banks and financial institutions in the last three years, the largest debt repayment in the history of corporate India,” said an Essar group official.
During the last three years, Essar Power has reduced its debt from a peak level of approximately ₹30,000 crore to ₹6,000 crore, Essar said in a media statement. Alongside this, Essar Power has been in the process of curating a green balance sheet around renewable energy which is in line with Essar’s strategy of investing in future-centric businesses which give a superior rate of return within the ESG framework, it said.
“With this transaction, Essar Power is rebalancing its power portfolio with the twin objective of deleveraging its balance sheets and investing in green and renewable power, thereby furthering its ESG-oriented future growth. Essar Power has a current power generating capacity of 2,070 MW across four plants in India and Canada,” according to Kush S, CEO, Essar Power Ltd.
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