Jaiprakash Power Venture’s attempts to monetise its hydro power assets to cut debt have fallen flat again after Anil Ambani’s Reliance Power terminated discussions to buy the assets for around ₹12,300 crore.
The deal was called off a day before the exclusivity of the memorandum of understanding between the two companies expired.
The assets were the 300-MW Bapsa II and 1,091-MW Karcham Wangtoo projects in Himachal Pradesh and the 400-MW Vishnuprayag plant in Uttarakhand.
“Due to prevailing regulatory uncertainties and tariff issues, which impact valuations, Reliance Power and JPVL have terminated discussions regarding Reliance Power’s acquisition of JPVL’s hydro portfolio of three projects with an aggregate capacity of 1,791 MW,” an R-Power spokesperson said in a statement.
Earlier, JPVL had reached an agreement to sell the Bapsa II and Karcham Wangtoo plants to Abu Dhabi National Energy Company (Taqa) for ₹9,689 crore. The deal was called off by Taqa in June.
The Karcham Wangtoo project has been in the eye of the storm as the permitted capacity of the plant and the tariff are yet to be decided by the Central Electricity Authority and Central Electricity Regulatory Commission, respectively.
While R-Power blamed the cancellation of talks on regulatory issues with the projects, JPVL said in a statement that the reasons were not “attributable to any regulatory uncertainties”, but to the commercial aspects. “The company is determined to take steps in the larger interest of the shareholders in the prevailing economic sentiment in the country,” said Manoj Gaur, Chairman, Jaypee Group, in a statement.
The deal was important for the debt-laden Jaypee Group, which is selling assets to reduce its loans. With over ₹56,000 crore of group level debt, the Group was trying to trim it by ₹15,000 crore in the current fiscal.
On Wednesday, R-Power’s stock gained 5.34 per cent to ₹75.90 on BSE, while that of JPVL lost 5.86 per cent to ₹13.65.