Jaypee-RPower exclusivity pact likely to be extended
Sep 05 2014 , New Delhi
In one of the biggest deals in the power space, Anil Ambani Group firm Reliance Power in July announced that it had signed an initial agreement to acquire all the three hydroelectric power plants of Jaiprakash Associates Ltd. The deal would be worth about Rs 12,000 crore.
Investment banking sources said the exclusivity period of the agreed Memorandum of Understanding (MoU) for the proposed deal is likely to be extended by 60 days.
The MoU between RPower and Jaypee Group was signed on July 27 and the exclusivity period was to end on September 25.
When contacted, an RPower spokesperson did not comment. Queries sent to Jaypee Group spokesperson remained unanswered.
SBI Capital Markets is the advisor to the proposed transaction. The Rs 12,000 crore deal includes Rs 9,500 crore in debt and Rs 2,500 in equity.
RPower plans to refinance the debt and the equity component would come from internal accruals. Currently, the company has about Rs 3,000 crore cash in hand. The deal would be EPS accretive from the first day.
Reliance CleanGen Ltd (RCL), a wholly-owned subsidiary of Reliance Power Ltd, and Jaiprakash Power Ventures Ltd, a subsidiary of Jaiprakash Associates Ltd, have inked the exclusive MoU.
JPVL's hydroelectric power portfolio has an aggregate capacity of nearly 1,800 MW, fully in operation.