JSW Energy provides details of scheme of arrangement

Between JSW Power Trading Company, JSW Green Energy & JSW Energy

JSW Energy announced that the Scheme of Arrangement is between JSW Power Trading Company and JSW Green Energy and JSW Energy. JSW Power Trading Company and JSW Green Energy are unlisted companies and 100% subsidiary companies of JSW Energy. The aforesaid transaction is within the ambit of related party transaction and is done on arm's length basis.

JSW Energy is engaged in the business of generating and selling the power. JSW Power Trading Company is engaged in the activities of trading of power and holds investments in Group Company. JSW Green Energy is also incorporated with the objective of trading in power and generating and selling green energy.

1. The Scheme of Arrangement entails the following:

a. Demerger of Power Trading Business of JSW Power Trading Company into JSW Green Energy .

b. Merger of Remaining JSW Power Trading Company into JSW Energy.

2. Demerger of Power Trading Business:

a. The demerger of power trading business is taking place between two 100% subsidiaries of JSW Energy and JSW Energy is neither the Demerged Company nor the Resulting Company for the purposes of demerger.

b. For the purposes of the power trading business, JSW Power Trading Company owns a Category I license which is the highest category power trading license issued by Central Electricity Regulatory Commission (CERC) for power trading in India. JSW Power Trading Company is a member in both the power exchanges namely, India Energy Exchange (IEX) and Power Exchange of India (PXIL). JSW Power Trading Company trades in power procured from the Company and its associates as well as third party suppliers/generators.

c. Upon demerger, JSW Green Energy will issue 1 (one) Equity share for every equity share held by JSW Energy in JSW Power Trading Company. Similarly, it will issue 1 (one) preference share for every 10 Preference shares held by JSW Energy in JSW Power Trading Company. There is no cash consideration payable upon demerger.

d. Overall, JSW Energy will continue to be 100% equity and preference shareholder in JSW Green Energy which will own the power trading business post demerger.

3. Merger

a. Post demerger of Power Trading Business, the remaining JSW Power Trading Company will merge into JSW Energy under the same scheme.

b. Since JSW Energy owns 100% shareholding in JSW Power Trading Company, no shares shall be allotted by JSW Energy upon merger. There is no cash consideration payable upon merger.

4. Rationale for the Scheme of Arrangement:

JSW Power Trading Company being a trading company is presently adequately capitalized through its share capital and reserves. The Regulatory requirements of the Trading business are adequately met based on its current net worth comprising of share capital and reserves. Further it holds investments in Group Company. Hence, in order to ensure focus on principal activity of power trading and to ensure that JSW Power Trading Company is relieved of the administrative functions as an Investment holding Company, it is proposed to hive off the Trading business into a separate 100% subsidiary which would focus only on Power trading activities and merge the remaining JSW Power Trading Company along with investments into its parent company for the sake of administrative convenience. 5. Application under clause 24(f) JSW Energy Limited has obtained approval of its audit committee and Board of Directors for the proposed Scheme of Arrangement and shall be filing an application under clause 24(f) of the listing agreement with BSE and NSE alongwith the fairness opinion obtained from the category I merchant banker.

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