JSW Energy Limited is all set to acquire Bina thermal power from Jaiprakash Power Ventures Limited for Rs 3,500 crore. The thermal power plant has installed capacity of 500 MW and have sufficient infrastructure to ramp it up to 1500 MW with marginal investment.
Burdened with burgeoning debt, the Jaypee group has decided to monetize its assets aggressively over the last couple of years bring down its overall of over debt of about Rs 55,000 crore. A fews of the deals ares already completed. Two major deal aggregating to Rs 15,100 crore are in the pipelines for which it has signed non-bionding agreement. These assets includes cement plants, hydro plants, and land parcels aggregating to Rs 21,638 crore. This is largest asset sale by any Indian diversified group to come overcome the stressed balance sheet.
The company has already entered into definitive agreement with JSW Energy for sale of two hydro power plant for RS 9,700 crore. In addition, agreement for sale of two cement plants in Madhya Pradesh for RS 5400 crore to Aditya Birla group’s Ultratech Cement has already been signed. The divestment of Bina Thermal power for RS 3,500 crore would take the total divestment to RS 25,138 crore.
“JSW has already completed the due diligence and is expected to enter into binding agreement shortly,” a person familiar with the development said. After the completion of the first deal with JSW Energy for tow hydro power plants is complete, both side will start focusing on Bina Power,” he added.
JSW Energy spokesperson declined to comment. An email sent to the JSW Energy and Jaiprakash Power Ventures Limited company went unanswered.
“In all likelihood, the hydro deal is likely to complete in the next couple of days,” the second person involded in the transaction said. JSW Energy and Jaiprakash Power venture had entered into binding agreement win November last year to acquire two hydro plants with combined capacity of 1391 MW – the 300 MW Baspa – II and the 1091 MW Karcham Wangtoo plant for Rs 9,700 crore. In December 2015, the company had entered into non-binding agreement with Ultra This would be third acquisition by JSW Energy in the last one year that will almost double its power generation capacity to 6000 MW from the current level of 3,140 crore.
In addition to these hydro assets, JSW Energy, signed a non-binding agreement to purchase a majority stake in the power arm of Monnet Ispat and Energy Limited with a combined capacity of 1050 MW. JSW Energy is a part of $11 billion JSW Group, controlled by billionaire Sajjan Jindal.