RInfra moves MERC for sale approval of Mumbai power business to Adani Transmission
Mumbai: Anil Ambani-led Reliance Infrastructure (RInfra) on Tuesday said it has filed an application before state electricity regulator Maharashtra Electricity Regulatory Commission (MERC) for approval to sell its Mumbai power business to Adani Transmission (ATL).
“RInfra has moved an application before Maharashtra Electricity Regulatory Commission (MERC) for its approval to assign its transmission and distribution licenses and transfer the integrated Mumbai power business to ATL,” the company said in a statement.
The company has sought approvals from MERC for assigning its licenses and transfer the businesses to RInfra’s wholly-owned subsidiary Reliance Electric Generation and Supply (REGSL), which will then be acquired by Adani Transmission. In December last year, RInfra signed a definitive binding agreement for 100% sale of its Mumbai power business with Adani Transmission for a total deal value of Rs13,251 crore.
In addition, regulatory assets under approval, which is estimated at Rs5,000 crore and net working capital on closing, estimated at Rs550 crore, will flow directly to RInfra. This will take the total consideration value to Rs18,800 crore. With this deal, RInfra, which is sitting on a debt of nearly Rs20,000 crore, would become debt-free, with up to Rs3,000 crore cash surplus, the company said.
RInfra currently caters to nearly 30 lakh residential, industrial and commercial consumers in the city’s suburbs, covering an area of 400 sq. km. In November, last year, RInfra completed the sale of its western region system strengthening scheme transmission undertakings to Adani Transmission for Rs1,000 crore.
The assets under the transaction include western region transmission Maharashtra project comprising 2,089-circuit km (Ckm) of transmission lines, and western region transmission Gujarat project comprising 974 Ckm of transmission lines. With this acquisition, ATL’s total network will be around 11,350 Ckm, of which approximately 9,000 Ckm are under operation.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.