Jaiprakash says Reliance hydropower deal collapses

NEW DELHI (Reuters) - Jaiprakash Power Ventures Ltd's deal to sell its hydropower business to Reliance Power Ltd has collapsed, underlining the struggle indebted Indian generators face trying to sell assets.

Jaiprakash said in a statement on Wednesday that talks with the Anil Dhirubhai Ambani Group (ADAG) had fallen apart due to a "difference of commercial aspects".

Reliance said the deal ended due to "prevailing regulatory uncertainties, and tariff issues, which impact valuations".

The deal for the three plants, with a combined capacity of 1,800 megawatts, was first announced in July and would have made Reliance the largest private power generator in India.

 

Like many Indian power and infrastructure companies, Jaiprakash, and parent Jaiprakash Associates Ltd , have been trying to sell assets to pay down the large debts they racked up before a prolonged economic slowdown squeezed revenues and hit profitability.

Lanco Infratech and GVK Power & Infrastructure are among other firms trying to sell assets.

Closing deals has proven tough, with disagreements over valuations, and uncertainty over the price regulators will allow generators to charge for electricity, scuppering talks.

Reliance's bid for Jaiprakash's business followed the collapse earlier in July of a plan by Jaiprakash to sell two of the three plants for $1.6 billion to an Abu Dhabi-led consortium.

Shares in Jaiprakash Power, which have fallen about 30 percent this year, closed down 5.54 percent on Wednesday before the news that the talks with Reliance had ended. Shares in its parent company finished the day down 7.95 percent.

(Reporting by Tommy Wilkes; editing by David Clarke)