(Adds background on Jaiprakash Power)
ABU DHABI/NEW DELHI, March 2 A consortium led by
Abu Dhabi National Energy Co (TAQA) has agreed to buy
two Indian hydroelectric power plants from Jaiprakash Power
Ventures in a deal worth about $1.6 billion, TAQA said
The group will spend $616 million on equity in the plants,
and in addition take over their non-recourse project debt,
bringing the total enterprise value to around $1.6 billion, a
TAQA spokesman told Reuters.
State-run TAQA, with 51 percent of the consortium, will
control the operations and management of both plants under the
deal. PSP Investments, one of Canada's largest institutional
investors, will own 39 percent and an infrastructure fund run by
India's IDFC Alternatives will hold 10 percent.
The two plants, located close to each other in the northern
state of Himachal Pradesh, have a combined generating capacity
of 1,391 megawatts, and are near another Indian hydroelectric
plant in which TAQA acquired a stake last year.
Along with a lignite power plant owned by TAQA, the latest
deal will bring TAQA's combined generating capacity in India to
1,741 MW. The deal, which needs regulatory and third-party
approvals, is expected to close in 2014, TAQA said.
Shares in Jaiprakash Power jumped 12 percent on Friday in
anticipation of the deal; Reuters reported early last month that
it was close to being signed. On Friday, the Indian company said
its board would meet on Saturday to consider recommendations for
cutting debt and boosting shareholder value.
Like many power and infrastructure companies in India,
Jaiprakash Power and its parent Jaiprakash Associates
have suffered from large debts and weakness in the Indian
economy over recent months.
Including subsidiaries, Jaiprakash Associates had total
debts of 550 billion to 560 billion rupees ($8.9-9.0 billion) in
September, which it planned to cut by 150 billion rupees through
sales of assets including cement and power plants during the
current fiscal year through March.
Jaiprakash Power reported a widening of its net loss to 1.53
billion rupees in the three months to December, while its shares
are down about 40 percent in the past 12 months.
Jaiprakash Associates last year sold its cement plant in
Gujarat state to UltraTech Cement for around $594
million including debt.
(Reporting by Stanley Carvalho in Abu Dhabi and Tommy Wilkes in
New Delhi; Writing by Andrew Torchia)