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JSW buys hydro power units of Jaypee, to acquire thermal plant too

JSW Energy Ltd has completed the acquisition of two hydro electric projects in Himachal Pradesh from Jaiprakash Power Ventures Ltd, at an enterprise value of Rs 9,275 crore ($1.4 billion) with additional milestone linked payments of up to Rs 300 crore by 2020, the company said on Tuesday.

The company struck the deal last year, the biggest ever in the Indian infrastructure sector. It allows JSW Energy to enter the hydro power sector and at one shot become the top player in terms of operational assets in the segment.

The assets include 300 MW Baspa - II HEP and 1,091 MW Karcham Wangtoo HEP, both housed under Himachal Baspa Power Company Ltd.

JSW has also inked an MoU to separately acquire Bina Thermal Power Plant. Located in Madhya Pradesh, this unit has 500 MW production capacity. It did not give the proposed deal value.

"The acquisition helps in diversifying the power generation portfolio with high quality hydro power assets, besides increasing the share of long-term PPA in our basket. The plan to acquire Bina Power Project will strengthen the business model of JSW Energy as also enhance our capacity to over 5,000 MW," said Sajjan Jindal, chairman and managing director, JSW Energy.

JSW aims to enhance the production capacity to over 10,000 MW by 2025. It currently has 4,531 MW under operations.

It had inked a deal to buy the hydro power assets from Jaypee Group last year after two separate deals for the same assets came unstuck.

SBI Capital Markets and Axis Capital acted as the financial advisors to JSW Energy on this deal while Cyril Amarchand Mangaldas provided legal advisory. PricewaterhouseCoopers provided financial and tax due diligence, Lodha & Co carried closing audits and Lahmeyer International carried out technical due diligence.

In July, JSW Energy divested 26 per cent stake in its Johannesburg Stock Exchange listed subsidiary South African Coal Mining Holdings Ltd (SACMH) to Comogen (Pty) Ltd.

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