United Arab Emirates’ Abu Dhabi National Energy Co, also known as TAQA, has pulled out of a $1.6-billion (₹9,625-crore) deal to purchase two hydro power plants of Jaiprakash Power Ventures, part of the Delhi-based Jaypee Group.

Following this decision, TAQA will have to pay a penalty of $9 million to Jaiprakash Power, a senior official at the Jaypee Group said.

The two plants in Himachal Pradesh — 300-MW Bapsa II and 1,000-MW Karcham Wangtoo — would now look for buyers at a better valuation, the official added. At the time of the announcement of the deal earlier this year, the valuation was ₹10,500 crore.

Change in strategy TAQA has changed its mind about the acquisition, Jaiprakash Power said in a filing to BSE on Thursday. “They have been constrained to take the said decision as a result of a change in the business strategy and priorities of their group.”

TAQA was to make the acquisition as part of a consortium where it would have held 51 per cent stake and controlled the operations and management of both plants. PSP Investments, a Canada-based institutional investor, was to hold a 39 per cent stake and IDFC Alternatives the remaining 10 per cent.

TAQA’s decision comes after Edqard LaFehr took charge as the company’s new chief executive. The Abu Dhabi-based company did not reply to queries sent by BusinessLine .

Setback The move comes as a setback for the Delhi-based Jaypee Group, which plans to bring its debt down by ₹15,000 crore.

The group has a debt of around ₹ 55-56,000 crore, although some analyst firms such as Credit Suisse estimate the group level debt at ₹64,000 crore.

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