Sajjan Jindal-owned JSW Energy has entered into a share purchase agreement with GMR Energy Ltd to acquire 100% stake in latter’s Odisha-based subsidiary, GMR Kamalanga Energy Ltd, for Rs 5,321 crore ($745 million at the current rate).
The transaction, the discussions of which had started in October, is valued at Rs 5,321 crore, subject to working capital and other adjustments, and is expected to be completed in three months, JSW Energy said in a regulatory filing.
As part of its strategy for expansion and consolidation in the power sector, JSW Energy is actively evaluating various strategic assets for the acquisition. Accordingly, it has decided to acquire GMR Kamalanga Energy Ltd, it further said.
Established in December 2007, GMR Kamalanga, which owns and operates a 1050 MW (3x350 MW) coal-based thermal power plant, is in the business of power generation located at Dhenkanal, District Kamalanga, Odisha.
Post-acquisition, the total installed power generation capacity of JSW Energy will increase to 5,609 MW. This will expand the company’s presence in the eastern region of the country and further diversify its fuel mix and offtake arrangements.
The deal value of Rs 5,321 crore for the asset includes the takeover of existing debt worth Rs 3,951 crore, and a payment of Rs 1,370 crore to the promoters, of which Rs 755 crore would be paid upfront while the balance Rs 615 crore is contingent consideration payable at different milestones.
GMR Kamalanga reported its revenue from operations at Rs 2,195 crore as on March 31, 2019. In 2017-18 and 2016-17, the company's revenue stood at Rs 1,990 crore and Rs 1,916 crore, respectively.
The deal has to be completed within 90 days from the execution date of the share purchase agreement, JSW Energy's filing added.
The deal is yet to receive approvals from the Competition Commission of India (CCI), lenders of GMR Kamalanga and Industrial Development Corporation of Odisha (IDCO). It will also require clearance from power purchase agreement beneficiaries, Haryana – Uttar Haryana Bijli Vitran Nigam Ltd, Dakshin Haryana Bijli Vitran Nigam Ltd and PTC India Ltd.
Last year on October 7, JSW Energy had announced that it entered into exclusive discussions with GMR Energy for a potential acquisition of its subsidiary, GMR Kamalanga Energy.
In January this year, JSW Energy bought an equity stake in debt-laden Jaiprakash Power Ventures Ltd, part of the Manoj Gaur-led Jaypee Group, as part of an exercise to restructure its loans to the debt-laden company.
Last year, it had scrapped a deal it had signed three years ago to acquire a 1,000-megawatt thermal power plant in Chhattisgarh from Jindal Steel & Power Ltd.