Adani Group has agreed to buy Anil Ambani-led Reliance Infrastructure’s Mumbai integrated power generation, transmission and distribution (GTD) business for Rs. 13,251 crore (million).
Adani Transmission has signed a binding share purchase agreement (SPA) with Reliance Infra to buy the GTD business, which caters to about 3 million customer.
Adani Transmisison Limited and Reliance Infrastructure (RInfra) have signed a Definitive Binding Agreement for 100% sale of its Mumbai power business for Rs 13,251 crore (million).
“The total deal value is at Rs 13,251 crore (million). This comprises of business valued at Rs 12,101 crore (million) and regulatory assets approved so far of Rs 1,150 crore (million).
In addition, regulatory assets under approval estimated at Rs 5,000 crore (million) and net working capital on closing estimated at Rs 550 crore (million) will flow directly to RInfra.,” read Rinfra’s announcement on Thursday.
Therefore, the total consideration value is estimated at Rs 18,800 crore (million).
R-Infra plans to utilise the proceeds from the sale to reduce its debt, and eventually becoming debt free and up to Rs 3,000 crore (million) cash surplus.
The Mumbai power business (known as Reliance Energy) is India’s largest private sector integrated power utility distributing power to nearly 3 million residential, industrial and commercial consumers in the suburbs of Mumbai, covering an area of 400 sq km.
It caters to a peak demand of over 1,800 MW, with annual revenues of Rs 7,500 crore with stable cash flows.
Commenting on the deal, Gautam Adani, chairman of the Adani Group, said, “The acquisition marks our foray in the distribution sector in India. We see the distribution sector as the next sunrise sector as India embarks on its mission to achieve 24×7 power for all.”