The prolonged Jaypee power deal was closed on Sunday with billionaire Sajjan Jindal signing an agreement with Manoj Gaur to acquire two hydro power projects of Jaiprakash Power Ventures Ltd (JVPL) for Rs 9700 crore.
JSW Energy on Sunday said it had executed documents to acquire 100 per cent stake in the two power plants with a combined capacity of 1391 MW from JPVL and other shareholders.
The board of directors of JPVL has approved the transfer of 300 MW Baspa II Hydro- Electric project and the 1091 MW Karcham Wangtoo Hydro-Electric project, both located in Himachal Pradesh, into a separate company called Himachal Baspa Power Company Ltd (HBPC Ltd) as a going concern through a scheme of arrangement which would be acquired by JSW Energy.
"Subsequent to the scheme of arrangement being made effective and subject to other terms and conditions agreed between the company and JPVL, JSW Energy proposes to acquire 100 per cent of the securities of HBPC Ltd held by JPVL," JSW Energy said in a filing to the stock exchanges.
This acquisition opens a new chapter in JSW Energy and makes it the largest hydro energy producer in the private sector.
With this the company total generation capacity including thermal will go up to 4531 MW.
Currently the company is setting up a 240 MW hydro power plant in Himachal Pradesh. Both the acquired power plants have 29 years and 37 years life respectively and can be extended for another 20 years, the company said.
"This is an attractive deal for our shareholders as it is expected to be earning accretive on closure. Our strategy is to increase capacity many fold and create synergy through a mix of organic and inorganic opportunities supported by excellence on operation," Sajjan Jindal, Chairman and Managing Director , JSW Energy said.
The Jaypee Group was trying for nearly a year to sell its power projects to retire mounting debt. Recently talks between the Group and Reliance Group had broken due to difference of opinion on valuation. Prior to that two other buyers including the Adani Group had walked away due to various reasons.
The money mobilized from the sale will go towards retiring debt of JPVL.
