India’s Reliance Infrastructure Limited on Wednesday (29) has announced the successful completion of the sale of its 100 per cent shareholding in Integrated Mumbai Power Distribution Business to Adani Transmission Ltd.
The deal was announced in December 2017 with the signing of a definitive binding agreement between Reliance Infrastructure Ltd. and Adani Transmission Ltd., and has now been completed with the transfer of shares and receipt of sale consideration.
“The total transaction value is £2.06 billion. Reliance Infrastructure has reduced debt liabilities by £1.51 bn from the deal proceeds. Regulatory assets under approval of £546.58 million will flow entirely to Reliance Infrastructure making the Company debt-free in 2019,” Reliance Infrastructure Limited said in a statement on Wednesday (29).
“This is the largest ever debt reduction for any company in the power sector in India. With this deal, Reliance Infrastructure is set to achieve top-end ratings,” the company said.
Reliance Infrastructure Ltd., which recently defaulted on debenture payments.
The integrated business includes the power generation units based at Dahanu, Power Transmission Network across Mumbai and Maharashtra and the Retail Power Distribution network in Mumbai suburbs.
The acquisition shall be housed in Adani Electricity Mumbai Ltd (AEML), a newly formed entity and a subsidiary of Adani Transmission Limited (ATL). It will serve over three million customers spread across 400 square kilometers in the city of Mumbai. This acquisition marks the firm’s foray into the large-scale electricity distribution sector, the most vital function within the power supply chain.
Business operations at AEML post-acquisition will continue to function seamlessly with the absorption of about 5,000 existing employees across three business areas, said Adani Transmission Ltd in a statement.
Speaking on the acquisition and expansion of the company, Gautam Adani, Chairman, Adani Group said, “I am delighted to announce our significant launch into large-scale city electricity distribution business and are privileged to serve over three million consumers in the city of Mumbai.
“We aspire to enter into electricity distribution business in key cities and districts in India in pursuit of Government of India’s vision to enable “Power for all by 2020”. We are committed to leverage the experience to emerge as a leading utility in electricity distribution, thereby providing state-of-the-art, reliable and competitive supply experience to all our customers,” Adani added.
