Abu Dhabi National Energy, which operates under the banner of Taqa, has withdrawn its offer to acquire two hydro-power assets of Jaiprakash Power Ventures Ltd (JPVL), a subsidiary of Indian infrastructure conglomerate Jaypee Group.
JPVL said the deal is being scrapped due to change in business strategy and priorities of Taqa. Taqa is now liable to pay break fee based on the earlier acquisition agreement, according to a statement by JPVL.
The development comes within five months of the agreement for the deal.
In March JPVL had struck the deal to hive off two hydro-power plants as a part of its group asset-disposal plan to a consortium of investors, including Taqa, Canadian institutional investor Indo-Infra Inc and IDFC Alternatives.
The two plants are Baspa Stage II and Karcham Wangtoo in the northern Himachal Pradesh which have combined capacity of 1,391 MW.
The equity value of the deal was $616 million (Rs 3,820 crore), of which 51 per cent was to come from Taqa. Indo-Infra was to bring in 39 per cent of the equity commitment as its stake in the consortium with IDFC Alternatives holding the remaining 10 per cent in the special purpose vehicle (SPV) created for the acquisition. The Indian PE firm was to invest around $62 million in the deal.
We have contacted IDCF Alternatives for more information and will update the story as we hear from the firm.
The consortium was also to acquire the assets’ non-recourse project debt which would have taken the overall enterprise value of the deal to $1.6 billion.
The deal would have made Taqa one of the largest private operators of hydroelectric plants in India.
The two plants are 35 km from the Sorang hydroelectric plant, in which Taqa acquired a stake last year. Following the completion of the transaction, Taqa’s gross operational power generation capacity in India would have become 1,741 MW, comprising three hydroelectric facilities and a lignite power plant.