Competition Commission clears Jaiprakash-TAQA deal

Competition watchdog CCI has cleared the USD 1.6 billion deal of Jaiprakash Power Ventures to sell its two hydel plants to Abu Dhabi National Energy Company (TAQA) and two other entities.
According to the Competition Commission of India, the deal is not likely to have any appreciable adverse effect on competition in India.
Under the deal, Jaiprakash Power Ventures, a leading private operator of hydel plants in India, would transfer its two plants in Himachal Pradesh - 300 MW Baspa-II and the 1091 MW Karcham-Wangtoo - to TAQA India Power Ventures, Indo-Infra Inc and India Infrastructure Fund-II.
"It is observed that as the acquirers have only a small presence in power generation in India, the proposed acquisition of the Target SPVs by the acquirers, is not likely to have any appreciable adverse effect on competition in India," the CCI said in an order dated May 1.

As per the proposed deal, Jaiprakash Power Ventures will internally restructure its business and transfer the power plants into two newly incorporated companies through a court approved scheme of arrangement.
On transfer of the plants to the new entities, the acquirers would purchase the entire stake in these entities "such that TAQA India, Indo-Infra and IIF-II would hold 51 percent, 39 per cent and 10 per cent stake respectively".

TAQA, in addition to a controlling stake in TAQA Neyveli Power Company (an Indian company that owns and operates a 250 MW power plant in Neyveli, Tamil Nadu) also has 5 per cent stake in Himachal Sorang.

Indo-Infra, is a wholly owned subsidiary of Public Sector Pension Investment Board, a Canadian Crown Corporation which acts as an investment manager for amounts transferred to it by the Government of Canada for certain pension funds.
On the other hand, India Infrastructure Fund-II, is established with the purpose of raising capital for making portfolio investments in infrastructure projects in India. IDFC Alternatives is the investment manager of this entity.
TAQA India, Indo-Infra Inc and India Infrastructure Fund-II (through IDFC Alternatives Ltd) had approached CCI on March 26 seeking its clearance after entering into the deal with Jaiprakash Power on March 1.