JSW Energy to buy JP's Bina thermal plant for Rs 3,500 cr

It also concluded acquisition of JP's two hydel plants for Rs 9,700 crore

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Sajjan Jindal-controlled JSW Energy and Jaiprakash Power Ventures on Tuesday announced they had entered into a binding memorandum of understanding (MoU) to acquire 100 per cent stake in the 500 megawatt (Mw) Bina thermal power plant located in Madhya Pradesh. Both sides did not disclose the transaction value, however, analysts estimate the project cost at around Rs 3,500 crore.

The actual deal value will depend on the final power purchase agreement (PPA) between JSW Energy and the power consuming states.

According to analysts, this transaction will not impact JSW’s debt while JP Group’s debt would stand at around Rs 45,000 crore.

In addition to this, the company concluded the acquisition of 100 per cent stakes in 300-Mw Baspa II and 1,091-Mw Karcham Wangtoo hydro electric power projects from Jaiprakash Power. These assets are valued at Rs 9,275 crore.

The company in a release said: “An additional consideration of Rs 300 crore may become payable upon receipt of certain additional consents and approvals related to Karcham Wangtoo hydro electric power project on or before September 6, 2020.”

Further, Jaiprakash Power Ventures has paid a compensation of Rs 150 crore to Himachal Baspa Power Company, with profit and loss from these plants accruing to JSW Energy from September 1, 2015. SBI Capital and Axis Capital were the financial advisors to the JSW Energy for the transaction.

The JSW Energy stock closed at Rs 74.25 a share on the BSE on Tuesday, up 9.6 per cent, while Jaiprakash Power Venture’s stock closed at Rs 5.85, up 5.03 per cent.

The company’s chairman and managing director, Sajjan Jindal said: “This acquisition helps in diversifying the power generation portfolio with high quality  hydro power assets, besides increasing share of long-term PPA in our basket. The plan to acquire Bina power project will further strengthen the business model of JSW Energy as also enhance our capacity to over 5,000 Mw.” With these acquisitions, the company hopes to achieve its aim of power generation capacity of over 10,000 Mw by 2025.

Last November, JSW Energy had signed a definitive agreement with Jaypee to acquire two hydro power plants for Rs 9,700 crore. They included the Baspa II and the Karcham Wangtoo projects. Further, the company had inked a non-binding agreement to purchase majority stake in the power arm of Monnet Ispat and Energy with a combined capacity of 1,050 Mw.