Mumbai Capital

Tata Power ends pact to acquire Ideal Energy power assets

Tata Power shares closed marginally at Rs 61.4 in a flat Mumbai market on Monday, valuing the company at Rs 16,606 crore. —file photo: AP

Tata Power shares closed marginally at Rs 61.4 in a flat Mumbai market on Monday, valuing the company at Rs 16,606 crore. —file photo: AP  

Deal to acquire 270 MW IEPL plant was agreed in December 2014

Tata Power, India’s largest integrated power company, announced the termination of a share purchase agreement (SPA) with Ideal Energy Projects Limited (IEPL) on Monday. The agreement, inked in December 2014, was to acqurie a 100 per cent stake in a 270 mega watts (MW) coal-based thermal power project in Maharashtra, extendable to 540 MW.

A Tata Power statement said, “As per the terms of the SPA, the acquisition was subject to fulfilment of certain conditions precedent. The company made all efforts to arrive at a workable solution to salvage a stressed asset along with key stakeholders.” The statement added that the stakeholders could not conclude, leading to non-fulfilment of the conditions precedent. While not mentioning any specific conditions for the termination of the agreement, the statement added that the company had decided not to pursue this opportunity any further and confirmed the termination of the SPA.

Ideal Energy, promoted by D P Mhaiskar, owns a 540 MW thermal power plant near Bela village of Nagpur district, of which 270 MW was commissioned in May 2013, and runs on domestic coal. Tata Power together with its subsidiaries and jointly-controlled entities has an installed gross generation capacity of 8,699 MW and has set a target of generating 18,000 MW by 2022.

Meanwhile, Tata Power through its wholly-owned renewable arm, Tata Power Renewable Energy Limited (TPREL), on Friday said that ‘it had issued and allotted guaranteed, unsecured, non-cumulative, redeemable, taxable, listed, rated, non-convertible debentures (NCDs) for an amount of Rs 425 crore on private placement basis’.

“The NCDs will carry a spread of 0.13 per cent above base rate of the State Bank of India (fully floating) payable annually and are guaranteed by the company,” said the company in filing to the exchanges, adding that the proceeds from the NCDs will be primarily used to prepay existing higher cost debt in TPREL, which controls operational capacity of 720 MW and under construction capacity of 250 MW. These NCDs, rated AA (SO) by CARE Limited, have been issued on a private placement basis through a private placement offer letter-cum-information memorandum.

Tata Power shares closed marginally at Rs 61.4 in a flat Mumbai market on Monday, valuing the company at Rs 16,606 crore.

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Printable version | Jun 5, 2020 10:32:49 PM | https://www.thehindu.com/news/cities/mumbai/business/Tata-Power-ends-pact-to-acquire-Ideal-Energy-power-assets/article14021240.ece

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