GMR Energy Ltd has entered into an agreement with Adani Transmission Ltd to part-divest and transfer its interest in transmission projects — Maru Transmission Services Ltd (MTSL) and Aaravalli Transmission Services Ltd (ATSL) — to the latter.
Currently, 74 per cent stake in MTSL and 49 per cent stake in ATSL shall be transferred to Adani Transmission. Under the agreement, there is an option to acquire the balance stakes in both the projects.
While the equity consideration for both the projects is ₹100 crore, the total value realisable for GMR could be ₹220 crore considering the equity amount and expected upside of up to ₹120 crore from regulatory proceeds of various appeals of the assets before the Appellate Tribunal for Electricity.
After the deal completion, the consolidated debt of the GMR Group would be reduced. The total debt in these projects as on March 31, 2016 is ₹324 crore.
GBS Raju, Business Chairman–Energy, GMR Group, in a statement, said: "GMR Group continues on its path of 'Asset Light Asset Right' strategy. The deal will release further liquidity and deleverage the GMR balance-sheet. The asset sale done at challenging market environment further signifies GMR's ability to create value for its stake-holders."
GMR Energy Ltd, a subsidiary of GMR Infrastructure, was awarded two transmission projects in 2010. MTSL operates 270 km of 400 KV/220 KV transmission lines in Rajasthan. The project was commissioned in 2013. And ATSL operates 96 km of 400 KV transmission line in Rajasthan, completed in 2014.
Both the assets operate at an average availability of more than 99.90 per cent and were awarded through a tariff-based competitive bidding process with licence period of 25 years, further extendable by 10 years.
All the three distribution companies of Rajasthan (discoms) are the beneficiaries of the transmission services being provided by these transmission SPVs.
The transmission assets, MTSL and ATSL, form a part of the excluded group of assets from the Tenaga transaction.
In May, Malaysia's electricity utility Tenaga Nasional Bhd announced its move to buy a 30 per cent stake in a select portfolio of GMR Energy Ltd assets for $300 million (around ₹2,000 crore). The deal was aimed at paring GMR Energy's debt.
GMR shares closed at ₹13.14, down 1.72 per cent, on the BSE on Friday.
Meanwhile, ATL is developing another transmission line from Suratgarh to Bikaner in Rajasthan, in close proximity to these assets.
Speaking on the development, Gautam Adani, Chairman of Adani Group, said ATL sees significant growth in the transmission sector and expected to maintain its leadership position in the country. The acquisition is in sync with the long-term strategy of ATL, he added.
ATL is the largest power transmission company operating in the private sector in India and owns, operate and maintain around 5,000 circuit km of transmission lines ranging from 400 KV to 765 KV, with a total transformation capacity of more than 12,000 MVA.
ATL has four fully-operational transmission systems that primarily serve the northern and western regions of India and is also constructing additional projects of around 1,900 circuit km in Rajasthan, Chhattisgarh, Madhya Pradesh, Maharashtra, Jharkhand and Bihar, also awarded through tariff-based competitive bidding process.
With the completion of the ongoing projects and the acquisition, the network is expected to increase from around 5,000 circuit km to 7,300 circuit km.
Source- The Hindu