Largest non-contentious debt reduction exercise by an Indian power firm
01 Oct 2018
3 Min Read
Editorial Team
Adani Transmission (ATL), part of the Adani Group, has completed the acquisition of Reliance Infrastructure's (RInfra) integrated business of generation, transmission and retail electricity distribution in Mumbai. The integrated business includes the power generation units based at Dahanu, the power transmission network across Mumbai and Maharashtra, and the retail power distribution network in Mumbai's suburbs.
<p></p>
<p>J Sagar Associates provided assistance to RInfra in its successful completion of the sale of its integrated Mumbai Power Division to ATL for a total consideration of Rs 188 billion, of which Rs 138 billion received upfront has been utilised for the reduction of debt liabilities of RInfra and the remaining estimated Rs 50 billion will flow to RInfra subsequently towards regulatory assets under approval.</p>
<p>'In our understanding, closure of this transaction was critical for Reliance ADAG, as the sale of its integrated generation, transmission and distribution Mumbai power business would result in reduction of debt of RInfra by Rs 138 billion in one move,' says<span style="font-weight: bold;"> Manav Raheja, Partner, J Sagar Associates.</span> </p>
<p>'This transaction is the largest non-contentious debt reduction exercise by an Indian power company, which was successfully completed within nine months from signing. RInfra is expected to receive an additional Rs 50 billion on account of regulatory assets under approval, which will make it debt-free in 2019.'</p>
<p>This acquisition marks ATL's foray into the large-scale electricity distribution sector, the most vital function within the power supply chain. The acquisition will be housed in Adani Electricity Mumbai (AEML), a newly formed entity and a subsidiary of ATL. Speaking on the acquisition and expansion of the company, <span style="font-weight: bold;">Gautam Adani, Chairman, Adani Group,</span> said, 'I am delighted to announce our significant launch into the large-scale city electricity distribution business and are privileged to serve over 3 million consumers in Mumbai. We aspire to enter into the electricity distribution business in key cities and districts in India in pursuit of the government's vision to enable Power for All by 2020. We are committed to leverage the experience to emerge as a leading utility in electricity distribution, thereby providing a state-of-the-art, reliable and competitive supply experience to all our customers.'</p>
<p><span style="font-weight: bold;">Anil Sardana, Managing Director & CEO, Adani Transmission, and Chairman, Adani Electricity Mumbai,</span> said, 'It is both an honour and privilege to serve the city of Mumbai with one of the most important utilities. With the 'power of service', Adani Transmission will strive to revitalise the customer experience combined with innovative service platforms to improve overall service. </p>
<p>Our endeavour would be to make this a benchmark distribution system, both in network management and customer services. The immense knowledge of the Mumbai team will also help us in multiplying our presence at other geographies.'</p>
<p>ATL owns and operates 35 bulk power grid substations with about 19,300 mva of transformation capacity across the country. ATL will continue to be the largest private-sector transmission and electricity distribution company in the country.</p>
<p> <span style="font-weight: bold;">- SERAPHINA D'SOUZA</span></p>
<p></p>
Adani Transmission (ATL), part of the Adani Group, has completed the acquisition of Reliance Infrastructure's (RInfra) integrated business of generation, transmission and retail electricity distribution in Mumbai. The integrated business includes the power generation units based at Dahanu, the power transmission network across Mumbai and Maharashtra, and the retail power distribution network in Mumbai's suburbs.
<p></p>
<p>J Sagar Associates provided assistance to RInfra in its successful completion of the sale of its integrated Mumbai Power Division to ATL for a total consideration of Rs 188 billion, of which Rs 138 billion received upfront has been utilised for the reduction of debt liabilities of RInfra and the remaining estimated Rs 50 billion will flow to RInfra subsequently towards regulatory assets under approval.</p>
<p>'In our understanding, closure of this transaction was critical for Reliance ADAG, as the sale of its integrated generation, transmission and distribution Mumbai power business would result in reduction of debt of RInfra by Rs 138 billion in one move,' says<span style="font-weight: bold;"> Manav Raheja, Partner, J Sagar Associates.</span> </p>
<p>'This transaction is the largest non-contentious debt reduction exercise by an Indian power company, which was successfully completed within nine months from signing. RInfra is expected to receive an additional Rs 50 billion on account of regulatory assets under approval, which will make it debt-free in 2019.'</p>
<p>This acquisition marks ATL's foray into the large-scale electricity distribution sector, the most vital function within the power supply chain. The acquisition will be housed in Adani Electricity Mumbai (AEML), a newly formed entity and a subsidiary of ATL. Speaking on the acquisition and expansion of the company, <span style="font-weight: bold;">Gautam Adani, Chairman, Adani Group,</span> said, 'I am delighted to announce our significant launch into the large-scale city electricity distribution business and are privileged to serve over 3 million consumers in Mumbai. We aspire to enter into the electricity distribution business in key cities and districts in India in pursuit of the government's vision to enable Power for All by 2020. We are committed to leverage the experience to emerge as a leading utility in electricity distribution, thereby providing a state-of-the-art, reliable and competitive supply experience to all our customers.'</p>
<p><span style="font-weight: bold;">Anil Sardana, Managing Director & CEO, Adani Transmission, and Chairman, Adani Electricity Mumbai,</span> said, 'It is both an honour and privilege to serve the city of Mumbai with one of the most important utilities. With the 'power of service', Adani Transmission will strive to revitalise the customer experience combined with innovative service platforms to improve overall service. </p>
<p>Our endeavour would be to make this a benchmark distribution system, both in network management and customer services. The immense knowledge of the Mumbai team will also help us in multiplying our presence at other geographies.'</p>
<p>ATL owns and operates 35 bulk power grid substations with about 19,300 mva of transformation capacity across the country. ATL will continue to be the largest private-sector transmission and electricity distribution company in the country.</p>
<p> <span style="font-weight: bold;">- SERAPHINA D'SOUZA</span></p>
<p></p>
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