Jaiprakash Power tumbles after TAQA calls off deal to buy hydro power plants

Jaiprakash Power Ventures fell 7.02% to Rs 19.20 at 15:09 IST on BSE after the company said TAQA is withdrawing from the agreement to purchase two hydropower plants owned by the company in Himachal Pradesh.

The announcement was made during trading hours today, 24 July 2014.

Meanwhile, the BSE Sensex was up 133.79 points, or 0.51%, to 26,281.12.

On BSE, so far 58.18 lakh shares were traded in the counter, compared with an average volume of 26.93 lakh shares in the past one quarter.

The stock hit a high of Rs 21.10 and a low of Rs 18.95 so far during the day. The stock hit a 52-week high of Rs 26.63 on 26 May 2014. The stock hit a 52-week low of Rs 8.55 on 2 August 2013.

The stock had underperformed the market over the past one month till 23 July 2014, falling 4.40% compared with 4.46% rise in the Sensex. The scrip had, however, outperformed the market in past one quarter, rising 31.70% as against Sensex's 14.30% rise.

The mid-cap company has an equity capital of Rs 2938 crore. Face value per share is Rs 10.

Jaiprakash Power Ventures said it received a notice from TAQA India Power Ventures (TAQA) informing that they will be withdrawing from the acquisition transactions as defined in the acquisition agreement dated 1 March 2014 entered between Jaiprakash Power Ventures and TAQA India Power Ventures and others.

TAQA stated that they have been constrained to take the said decision as a result of a change in the business strategy and priorities of their group, the Indian company said in a statement.

Jaiprakash Power said that such withdrawal makes TAQA liable to pay a break fee in terms of the said acquisition agreement.

In March this, a consortium led by TAQA (an indirectly owned and controlled subsidiary of Abu Dhabi National Energy Company PJSC) agreed to buy the 1091 megawatt (MW) Karcham Wangtoo and 300 MW Baspa II hydroelectric power plants from Jaiprakash Power Ventures in a deal that would have enabled the Indian company to repay some of its debt. The other investors in the consortium included Canada's Public Sector Pension Investment Board and IDFC Alternatives, the private equity arm of infrastructure finance company IDFC.

Jaiprakash Power Ventures reported a net loss of Rs 171.98 crore in Q4 March 2014, higher than net loss of Rs 122.26 crore in Q4 March 2013. Total income rose 19.24% to Rs 459.03 crore in Q4 March 2014 over Q4 March 2013.

Jaiprakash Power Ventures currently operates the largest hydroelectric power plant in the private sector in India.

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