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Adani Transmission, the country’s largest private power transmitter, will buy into two transmission projects of the GMR group. This comes almost two months after a Malaysian power utility agreed to buy 30 per cent in 10 power generation assets of the debt-ridden GMR Energy Ltd (GEL), a subsidiary of GMR Infrastructure Ltd (GIL), for $300 million.
Under a definitive agreement signed with GEL, Adani Transmission Ltd (ATL) will pick up stakes in Maru Transmission Services Ltd (MTSL) and Aravali Transmission Services Ltd (ATSL). The deal will transfer 74 per cent stake in MTSL and 49 per cent in ATSL to ATL, with an option to acquire the balance stakes in both projects.
While GMR has been selling assets to offload debt, the Adani group has been on a buying spree in the power and port sectors. It bought Avantha’s 600-Mw (megawatt) power plant for Rs 4,200 crore, a stake in Dhamra port for Rs 5,500 crore, and Lanco’s 1,200-Mw Udupi power plants for Rs 6,300 crore, among others.
The GMR group’s consolidated debt was Rs 46,890 crore at the end of March. It has been making losses for the past two years with a high debt to equity ratio of 7.89 per cent.
The equity consideration ascribed for the Adani transaction involving both the projects was Rs 100 crore, GMR said. The total value realisable for GEL could be Rs 220 crore, considering this equity consideration and the expected upside of up to Rs 120 crore from regulatory proceeds of various appeals of the assets before the appellate power sector regulator.
The sale proceeds will be used for retiring group debt just as the entire proceeds of about Rs 2,000 crore from Tenaga was used to retire debt at the group level. The total debt in the two transmission projects as on March 31, 2016, was Rs 324 crore.
GEL was awarded the two projects on BOOM basis in 2010. MTSL operates 270 km of 400 KV/220 KV transmission lines in Rajasthan. The project started operations in 2013.
ATSL operates 96 km of a 400 KV transmission line in Rajasthan that started operations in 2014. These lines supply power to all the three state-owned utilities in Rajasthan.
The transmission assets (MTSL and ATSL) form a part of the excluded group of assets from the Tenaga transaction.
GBS Raju, Business Chairman – Energy, GMR Group, said, “The deal will release liquidity and deleverage the GMR balance sheet. The asset sale in a challenging market environment signifies GMR’s ability to create value for its stakeholders.”
Both the assets were operating at an average availability of more than 99.90 per cent since the day of commissioning, the Adani group said in a statement.
These assets were awarded through a tariff based competitive bidding process with a licence period of 25 years, further extendable by 10 years. ATL is developing another transmission line from Suratgarh to Bikaner in Rajasthan, in close proximity to these assets.
Gautam Adani, chairman of the Adani Group, said, “Adani Transmission Ltd is foreseeing significant growth in the transmission sector and expects to maintain its leadership position in the country. This acquisition is in sync with the long-term strategy of ATL.”
ATL is the largest power transmission company operating in the private sector in India and owns, operates and maintains around 5,000 circuit km of transmission lines ranging from 400 KV to 765 KV, with a total transformation capacity of more than 12,000 MVA.
ATL has four fully operational transmission systems that primarily serve the northern and western regions and is constructing additional projects of around 1,900 circuit km in Rajasthan, Chhattisgarh, Madhya Pradesh, Maharashtra, Jharkhand and Bihar. With the completion of all ongoing projects and after this acquisition the network is expected to increase from around 5,000 to 7,300 circuit km.
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Under a definitive agreement signed with GEL, Adani Transmission Ltd (ATL) will pick up stakes in Maru Transmission Services Ltd (MTSL) and Aravali Transmission Services Ltd (ATSL). The deal will transfer 74 per cent stake in MTSL and 49 per cent in ATSL to ATL, with an option to acquire the balance stakes in both projects.
While GMR has been selling assets to offload debt, the Adani group has been on a buying spree in the power and port sectors. It bought Avantha’s 600-Mw (megawatt) power plant for Rs 4,200 crore, a stake in Dhamra port for Rs 5,500 crore, and Lanco’s 1,200-Mw Udupi power plants for Rs 6,300 crore, among others.
The GMR group’s consolidated debt was Rs 46,890 crore at the end of March. It has been making losses for the past two years with a high debt to equity ratio of 7.89 per cent.
The equity consideration ascribed for the Adani transaction involving both the projects was Rs 100 crore, GMR said. The total value realisable for GEL could be Rs 220 crore, considering this equity consideration and the expected upside of up to Rs 120 crore from regulatory proceeds of various appeals of the assets before the appellate power sector regulator.
The sale proceeds will be used for retiring group debt just as the entire proceeds of about Rs 2,000 crore from Tenaga was used to retire debt at the group level. The total debt in the two transmission projects as on March 31, 2016, was Rs 324 crore.
GEL was awarded the two projects on BOOM basis in 2010. MTSL operates 270 km of 400 KV/220 KV transmission lines in Rajasthan. The project started operations in 2013.
ATSL operates 96 km of a 400 KV transmission line in Rajasthan that started operations in 2014. These lines supply power to all the three state-owned utilities in Rajasthan.
The transmission assets (MTSL and ATSL) form a part of the excluded group of assets from the Tenaga transaction.
GBS Raju, Business Chairman – Energy, GMR Group, said, “The deal will release liquidity and deleverage the GMR balance sheet. The asset sale in a challenging market environment signifies GMR’s ability to create value for its stakeholders.”
Both the assets were operating at an average availability of more than 99.90 per cent since the day of commissioning, the Adani group said in a statement.
These assets were awarded through a tariff based competitive bidding process with a licence period of 25 years, further extendable by 10 years. ATL is developing another transmission line from Suratgarh to Bikaner in Rajasthan, in close proximity to these assets.
Gautam Adani, chairman of the Adani Group, said, “Adani Transmission Ltd is foreseeing significant growth in the transmission sector and expects to maintain its leadership position in the country. This acquisition is in sync with the long-term strategy of ATL.”
ATL is the largest power transmission company operating in the private sector in India and owns, operates and maintains around 5,000 circuit km of transmission lines ranging from 400 KV to 765 KV, with a total transformation capacity of more than 12,000 MVA.
ATL has four fully operational transmission systems that primarily serve the northern and western regions and is constructing additional projects of around 1,900 circuit km in Rajasthan, Chhattisgarh, Madhya Pradesh, Maharashtra, Jharkhand and Bihar. With the completion of all ongoing projects and after this acquisition the network is expected to increase from around 5,000 to 7,300 circuit km.
