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Adani Electricity hits Tata Power's profitability in June quarter

For its June 2019-ended quarter, Tata Power reported an exceptional expense of Rs 328.97 crore as standby provision

Amritha Pillay  |  Mumbai 

tata power

For its June 2019-ended quarter, reported an exceptional expense of Rs 328.97 crore as standby provision. The exceptional item is owing to litigation against Adani Electricity’s Mumbai operations, where the Supreme Court (SC) upheld an appellate order.

“With respect to the standby litigation with Mumbai, SC during the quarter has upheld the appellate tribunal for electricity order dated December 20, 2006, directing the group to pay Rs 354 crore,” the company said in notes along with its financial results for the quarter under review explaining exceptional items.

The note added, “The payment is along with interest at 10 per cent per annum from April 1, 2004, up to the date of payment. Consequently, has recognised an expense of Rs 329 crore net of amount recoverable from customers, including adjustment with consumer reserves.”

The hit on account of the litigation was partially offset with a reversal in provisioning related to its Georgia business.

“During the quarter, pursuant to debt restructuring of Adjaristsqali Georgia LLC (AGL), significant progress towards execution of long-term power purchase agreement with Government of Georgia and receipt of insurance claims, the group has reversed provision for financial guarantee obligation and impairment towards its investments in AGL amounting to Rs 235 crore.”

First Published: Thu, August 08 2019. 20:18 IST