Regulatory uncertainty may delay RPower-Jaypee deal

September 17, 2014 05:00 pm | Updated 05:00 pm IST - New Delhi

The Anil Ambani Group firm Reliance Power in July had announced that it had signed an initial agreement to acquire all the three hydroelectric power plants of Jaiprakash Associates.

The Anil Ambani Group firm Reliance Power in July had announced that it had signed an initial agreement to acquire all the three hydroelectric power plants of Jaiprakash Associates.

The proposed sale of Jaypee group’s hydel assets to Reliance Power in an estimated Rs. 12,000-crore deal may get delayed due to regulatory uncertainties over tariff issues related to 1,000 MW Karcham Wangtoo hydro project — one of the three projects being sold.

In one of the biggest deals in the power space, the Anil Ambani Group firm Reliance Power in July had announced that it had signed an initial agreement to acquire all the three hydroelectric power plants of Jaiprakash Associates. The deal would be worth about Rs. 12,000 crore.

Sources said that Jaiprakash Power Ventures Ltd (JPVL) has withdrawn its application before CERC pertaining to interim tariff for electricity generated from Karcham Wangtoo hydro project and this could delay the deal.

When contacted, Reliance Power declined to comment, while there was no response to queries sent to Jaypee group. JPVL, which is a part of Jaypee Group, is expected to file a new application for final tariff before the Central Electricity Regulatory Commission (CERC).

This project is part of the proposed deal with Reliance Power. Sources said that regulatory uncertainty over the Karcham Wangtoo project, pertaining to tariff charged for electricity produced from the plant, could delay the deal since major chunk of the transaction pertains to debt.

The Rs. 12,000-crore deal includes Rs. 9,500 crore in debt and Rs. 2,500 in equity. According to sources, the tariff uncertainty could adversely impact Jaypee Group’s financials and debt reduction plans.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.