JSW Energy to purchase GMR's Kamalanga power project for Rs 5,321 cr

JSW Energy will acquire GMR’s Kamalanga power project (1,050 Mw) in Odisha for Rs 5,321 crore. In a notice to exchanges, JSW said it had entered into a ‘share purchase agreement’ with GMR Energy for acquiring 100 per cent shares in its subsidiary GMR Kamalanga Energy.

Post-acquisition, the total installed power generation capacity of JSW Energy will increase to 5,609 Mw. “This will expand the company’s presence in the eastern region of the country and further diversify its fuel mix and off take arrangements,” the company said. 

Kamalanga is one the 36 identified stressed power assets that was undergoing debt resolution. The project was commissioned in 2014 and ran into trouble because of lack of coal supply. The coal block allotted to the project was cancelled by a Supreme Court judgment in the same year. It also didn’t get any coal supply linkage from the Centre. 

Built at a cost of Rs 6,000 crore, it had a debt of Rs 4,100 crore. The project has power purchase deal with Haryana, Odisha and Bihar.

GMR Group has been selling its assets to offload debt. It recently sold one of its power projects to Adani Power. Lenders to GMR Chhattisgarh Energy (1,370 Mw) approved the bid by Adani Power for the project in a bidding outside the National Company Law Tribunal. 

The project has a debt of over Rs 5,800 crore. It ran into problem due to absence of long-term power purchase agreements except a short-term deal with Gujarat. At group level, GMR would see reduction in debt exposure of equivalent quantum. The company’s another unit in Maharashtra’s Warora plant (600 Mw) is also searching for buyers. Credit rating agencies are of view that it will default on its Rs 3,000-crore loan amount due to lack of buyers. 

Of the total 36 identified stressed assets in the power sector, seven have been resolved through various debt-restructuring schemes by lenders. This includes Jaypee’s Praygaraj, which was bought by Tata Power JV with ICICI Bank, Lanco Teesta Hydropower project was taken over by NHPC and Rattan India Power’s Amravati project was sold to a consortium led by Goldman Sachs. Apart from GMR Chhattisgarh, Adani Power has also bought Avantha Group’s Korba West power project.