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New Delhi: Jaiprakash Power Ventures Ltd, the debt-laden Indian generator, rose the most in more than two months after Reliance Power Ltd (R-Power) agreed to buy its three existing hydropower plants valued at $1.7 billion.

Unit Reliance CleanGen will take over JP Power’s hydropower plants in the country that have a combined capacity of 1,791 megawatts, according to a statement on Sunday from billionaire Anil Ambani-controlled R-Power. JP Power and its units had 24,460 crore of total debt and 620 crore of cash and equivalents as of 31 March, according to data compiled by Bloomberg.

JP Power shares jumped as much as 8.7% to 20.60 and traded at 19.80 as of 11:23am in Mumbai. The shares have gained 4.8% this year, compared with a 23% increase in the benchmark S&P BSE Sensex.

R-Power shares gained as much as 3% to 93.60 and traded at 92.80 at 11:24am. The shares were up 26% this year.

The sale will give R-Power, which currently operates 4,525MW of generation capacity, ownership of cleaner hydro-based capacities at about 5.5 crore a megawatt. The cost of setting up a new hydro project is approximately 7 crore a megawatt.

“This is great for Jaiprakash as it’ll help it cut debt," said P. Phani Sekhar, a Mumbai-based fund manager at Angel Broking Ltd. “The hydropower plants are operational assets, and will help increase R-Power’s cash flows."

Abu Dhabi National Energy Co. withdrew an agreement to buy two of Jaiprakash’s plants, the Indian company said in a 24 July statement, citing a change in the strategy of the Abu Dhabi company, known as Taqa. Bloomberg

R-Power has sued HT Media Ltd, publisher of Mint, in the Bombay high court over a 12 May 2010 front-page story in Mint that it disputed. HT Media is contesting the case.

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