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R-Power To Buy All Hydro Projects Of Jaypee Group

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Anil Ambani Group firm Reliance Power (R-Power) on Sunday (27 July) said it has signed an initial agreement to acquire all the three hydroelectric power plants of Jaiprakash Associates Ltd. The Jaypee Group had announced on Thursday (24 July) that the Abu Dhabi National Energy Company (TAQA) was withdrawing from the nearly Rs 10,000 crore deal to acquire its two hydel power projects.

The deal will make  Anil Ambani's group the largest private hydropower provider in India.

The companies did not disclose the terms of the deal but local media estimated the hydropower portfolio's value at around Rs 12,000 crore ($2 billion). The plants have a total capacity of nearly 1,800 megawatts.

"Reliance CleanGen Ltd (RCL), a 100 per cent subsidiary of Reliance Power Ltd, and Jaiprakash Power Ventures Ltd (JPVL), a subsidiary of Jaiprakash Associates Ltd (JAL), today announced the signing of an exclusive Memorandum of Understanding (MOU), for the 100 per cent acquisition by RCL of the entire hydroelectric power portfolio of JPVL," the company said in a statement here.

JPVL's hydroelectric power portfolio has an aggregate capacity of nearly 1,800 MW, fully in operation, the largest in the private sector in India, and with an asset base of over Rs 10,000 crore.

The portfolio comprises of the three plants, with an asset life of over 50 years, each using run-of-the-river technology to convert natural water flow to electricity, eliminating the need for a large reservoir.

JAL intends to utilise the entire proceeds of the proposed transaction to reduce its outstanding debt, and thereby deleverage its consolidated balance sheet, Reliance Power said.

"The completion of the proposed transaction would make Reliance Power the largest provider of hydroelectric power in the private sector in India," it added.

Currently, Reliance Power has hydroelectric power projects aggregating over 5,000 MW under development, of which 4,200 MW are located in Arunachal Pradesh, 700 MW in Himachal Pradesh and 400 MW in Uttarakhand.

SBI Capital Markets Ltd are acting as advisors for the proposed Transaction.

Manoj Gaur, executive chairman of Jaiprakash Associates, had said in March that the wider group planned to cut its Rs 62,000 crore of debt by Rs 25,000 crore by March 2015, largely via asset sales.

Group debt currently stands at Rs 66,000 crore, television channel ET NOW reported. A spokesman for Jaiprakash could not immediately be reached to confirm the current size of its debts.

Read Also: TAQA Pulls Out Of Power Deal With Jaypee Group