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21
December 2017
 |
RInfra (The Total
Investment & Insurance Solutions)
Announcing
the largest ever debt reduction exercise by an Indian corporate, Reliance
Infrastructure (RInfra) on Thursday said it has signed a definite agreement for
the sale of its Mumbai power business to Adani Transmission Ltd for a total
consideration of Rs 18,800 crore.
While
the total deal value of the sale of the Mumbai power utility Reliance Energy is
Rs 13,251 crore, regulatory assets estimated at Rs 5,000 crore and net working
capital on closing estimated at Rs 550 crore would also accrue to RInfra as
part of the agreement, a company release said here.
"Reliance
Infrastructure Ltd today announced signing of a definitive binding agreement
with Adani Transmission Ltd (ATL) for 100 per cent stake sale of its Mumbai
power business, which includes the integrated business of generation, transmission
and distribution of power for Mumbai," it said.
"Total
deal value is at Rs 13,251 crore. This comprises of business valued at Rs
12,101 crore and regulatory assets approved so far of Rs 1,150 crore. In
addition, regulatory assets under approval estimated at Rs 5,000 crore and net
working capital on closing estimated at Rs 550 crore will flow directly to
RInfra.
"Total
consideration value is estimated at Rs 18,800 crore," it said.
"RInfra
will utilize the proceeds of this transformative transaction entirely to reduce
its debt, becoming debt free and up to Rs 3,000 crore cash surplus," the
statement added. The
Total Investment & Insurance Solutions
The
proposed transaction is subject to the customary approvals.
Describing
the deal as the largest ever debt reducing exercise by any corporate, RInfra
said that monetisation of the Mumbai power business is a major step in the
companmy's deleveraging strategy for future growth.
"Reliance
Infra's Mumbai power business (known as Reliance Energy) is India's largest
private sector integrated power utility distributing power to nearly 3 million
residential, industrial and commercial consumers in the suburbs of Mumbai,
covering an area of 400 sq km," the statement said.
The
Mumbai utility caters to a peak demand of over 1,800 MW, with annual revenues
of Rs 7,500 crore with stable cash flows, it added.
RInfra
also said that, going forward, it will focus on upcoming opportunities in the
asset-light engineering, procurement and construction, as well as defence
businesses. The Total Investment & Insurance
Solutions
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