With a motto to make Reliance Communications debt-free, Anil Ambani has decided that he will sell Anil Dhirubhai Ambani Group’s infrastructure company, Reliance Infrastructure (RInfra) to Adani. As per the reports, Adani Transmission Limited (ATL) to buy Reliance Infra for Rs 18,800 crore.
Reliance Infra, on Thursday, signed a deal with ATL for a 100 percent stake in its Mumbai power business. As per the deal, ATL will take control of the integrated business of power generation, transmission, and distribution.
India’s largest private integrated power utility, RInfra said that the latest deal is the largest ever debt reduction exercise by any corporate. As soon as the deal took place, the shares of both the companies climbed up to 10 percent on the Bombay Stock Exchange (BSE) in intra-day trade.
The amount of the deal has been signed for a total consideration of Rs 18,800 crore, but actually, its value is Rs 13,251 crore that comprises the entire power business valued at Rs 12,101 crore and regulatory assets of Rs 1,150.
On the other hand, RInfra clarified that the regulatory assets of Rs 5,000 crore and net working capital of Rs 550 crore will flow directly to the company.
Gautam Adani, Chairman of the Adani Group, said in a statement, “The acquisition marks our foray into the distribution sector in India. We see distribution as the next sunrise sector as India embarks on its mission to achieve 24×7 power for all.” He further added that there was a massive opportunity for organic as well as inorganic growth.
The Mumbai power business of RInfra is a gigantic power generation and distribution system that caters to a population of more than 3 million people in residential, industrial, and commercial consumers of Mumbai.
It has a power generation capacity of over 1,800 MW, with the help of it RInfra generates annual revenues of Rs 7,500 crore with stable cash flows. In the last quarter that ended in September, Reliance Infrastructure posted a net profit of Rs 5.44 billion and reported total debt of around Rs 140 billion.
RInfra has got contracts worth Rs 5,000 crore through international competitive bidding in Bangladesh to set up infrastructure for a 750 MW LNG-based combined cycle power plant, in the first week of December.
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