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Home News Power Sector News CCI approves RInfra-Adani Transmission deal on Mumbai power business

CCI approves RInfra-Adani Transmission deal on Mumbai power business

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CCIThe Competition Commission of India (CCI) has approved the sale of Reliance Infrastructure's (RInfra) integrated Mumbai power business to Adani Transmission in a deal worth Rs 18,800 crore. Anil Ambani-led Reliance Infrastructure signed a definitive binding agreement with Adani Transmission (ATL) for a 100 per cent stake sale of its Mumbai power business, including integrated business of generation, transmission and distribution of power, in December 2017.

As part of its deleveraging strategy, RInfra will utilize the entire transaction proceeds to pare its debt of nearly Rs 29,000 crore, thereby becoming debt-free and garnering up to Rs 3,000 crore cash surplus. The surplus amount would help the company realize its future plans to focus on defence manufacturing, engineering, procurement, and construction businesses. Its Reliance Defence and Engineering Ltd has already signed joint ventures with global defence giants like Dassault Aviation, Rafael Advanced Systems (Israel), and Antonov (Ukraine).

Adani Transmission Ltd, the power distribution arm of Adani Enterprises, will pay an initial Rs 13,251 crore for Reliance's Mumbai power business and Rs 5,550 crore at a later date based on certain approvals, the Reliance statement said. Gautam Adani, Chairman of the Adani Group, had earlier said the acquisition marked the company's foray into the distribution sector in India. "We see distribution as the next sunrise sector as India embarks on its mission to achieve 24x7 power for all," he said.

With this acquisition, Adani Transmission will enjoy the benefit of scale and of being an integrated distribution and transmission business in India; Rinfra's Mumbai distribution assets have valid licence till August 2036.

Earlier, RInfra had signed a term sheet with Adani Transmission for the sale of its WRSSS transmission assets and Parbati Koldam project.

Reliance Infrastructure's Mumbai power business, known as Reliance Energy, is India's largest private integrated power utility, distributing power to nearly 3 million residential, industrial and commercial consumers in the Mumbai suburbs covering 400 sq km. RInfra had bought Mumbai power business from Bombay Suburban Electric Supply in 2002. It caters to a peak demand of over 1,800 mw, with annual revenues of Rs 7,500 crore with stable cash flows.

The company's earlier attempts to sell-off its assets had failed due to various reasons. In November 2015, Reliance Infra made a non-binding pact to sell 49 per cent stake in the business to Canadian Pension Investment Board, but the deal did not proceed. Greenko, a Hyderabad based renewable energy company, with the support of Singapore's GIC and Abu Dhabi Investment Authority (ADIA), had also submitted a proposal. It also failed. Besides, CLP India and R-Infra's main competitor in Mumbai, Tata Power, and Ahmadabad-based Torrent were also eyeing the bid.


Source- Business today


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