Essar Power Transmission Company (EPTCL) has entered into a definitive agreement with Adani Transmission (ATL) to sell one of its two transmission lines at an enterprise valuation of Rs 1,913 crore.
EPTCL has 465-km transmission lines across three states. The asset sold by the Essar group is an operational 400 kV inter-state transmission line linking Mahan power station in Madhya Pradesh to Sipat in Chhattisgarh pooling substation. The project operates under the CERC-regulated return framework.
Adani Transmission said the acquisition would consolidate its presence in central India. “ATL is well on a path to achieve its 20,000 ckt kms target before time,” said Anil Sardana, managing director and chief executive officer of Adani Transmission.
The acquisition is in line with ATL’s value-added growth strategy through organic as well as inorganic growth opportunities.
With this acquisition, the cumulative network of ATL will reach 19,468 ckt kms, of which 14,952 ckt kms are operational and 4,516 ckt kms are under various stages of execution. The deal will also help ATL derive synergies in terms of O&M cost optimisation and shared resources.
For Essar group, the sale is part of its plan to reduce debt across companies. In the past three years, Essar Power has reduced its debt from a peak of approximately Rs 30,000 crore to Rs 6,000 crore. Alongside this, Essar Power is in the process of curating a green balance sheet around renewable energy, which is in line with Essar’s strategy of investing in future-centric businesses.
“With this transaction, Essar Power is rebalancing its power portfolio with the twin objective of deleveraging its balance sheets and investing in green and renewable power, thereby furthering its ESG-oriented future growth,” said Kush S, CEO of Essar Power.
Essar Power has a current power generating capacity of 2,070 Mw across four plants in India and Canada, the CEO said.
This is part of a deleveraging strategy following which Essar has repaid over Rs 1.80 trillion to banks and financial institutions in the past three years, making it the largest debt repayment in India, said a company official.
Source: Business-Standard