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Adani in talks to buy Jindal Power

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Jindal Steel & Power Limited (JSPL) is in talks with Adani Group to sell its power generating subsidiary – Jindal Power (JPL), according to reports.
Report says that the transaction, values the business around Rs 18,000-20,000 crore, inclusive of debt,
The move is aimed at deleveraging the consolidated balance sheet, says report.

Jindal group’s consolidated debt stood at Rs 45,500 crore at the end March 2015 and a successful deal will help it reduce the debt by half.

“On standalone basis though, Jindal Power is one of the most underleveraged companies. With an installed capacity of 3,400 mw, its total long-term debt is about Rs 5,120 crore,” a source added.

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Coal shortage, declining realisation and lack of significant usage of its recently launched projects  have affected the profitability of the group’s steel and power businesses.

“Even after adjusting debt, the net proceeds from the deal would be upward of Rs 13,000 crore that would help JSPL bring down its debt to a manageable level to about Rs 20,000-21,000 crore,” said the person.

“JSPL as a part of its corporate policy doesn’t comment on speculative reports. We would certainly inform our stakeholders, including media, in event of any news/development relating to JSPL’s businesses,” a group spokesperson told the daily.

The acquisition of JPL, which currently has a total installed capacity of 3,400MW, will sharply rise the installed capacity of Adani Power to 13,880MW. Adani Power intends to increase its installed capacity to 20,000MW by 2020.

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