(Adds details from filing, context, shares)
MUMBAI/NEW DELHI, July 24 An Abu Dhabi-led
consortium is pulling out of a $1.6 billion deal to buy two
hydroelectric power plants from Jaiprakash Power Ventures Ltd
, dealing a blow to the Indian group's efforts to cut
Abu Dhabi National Energy Co (TAQA) told
Jaiprakash Power that the decision was due to a change in the
group's business strategy and priorities, Jaiprakash said in a
stock exchange filing on Thursday.
A senior TAQA official earlier told Reuters that it was
exiting the deal, which was made public in March, because of "a
change in strategy".
Shares in Jaiprakash closed down 7.49 percent, while shares
in parent Jaiprakash Associates finished the day 5.99
percent lower, compared with a rise of 0.48 percent in the
benchmark Indian index.
Like many of India's infrastructure and construction firms,
Jaiprakash has been trying to revive profitability by cutting
debt, which has weighed heavily on the group at the same time
that an economic slowdown has curbed revenue.
Manoj Gaur, executive chairman of Jaiprakash Associates,
said in March the wider group planned to cut its 620 billion
Indian rupees ($10.3 billion) of debt by 250 billion rupees by
March 2015, largely via asset sales.
Group debt currently stands at 660 billion rupees, Indian
television channel ET NOW reported. A spokesman for Jaiprakash
could not immediately be reached to confirm the current size of
TAQA is liable to pay a "break fee", Jaiprakash Power said
on Thursday, without giving details.
($1 = 60.1300 Indian Rupees)
(Reporting by Devidutta Tripathy and Tommy Wilkes; Editing by
Subhranshu Sahu and Jane Baird)