Rel Infra signed the sale agreement with Adani Transmission Ltd in December last year.
Mumbai: The Maharashtra Electricity Regulatory Commission (MERC) has approved the proposed hundred per cent stake sale of Reliance Infrastructure Ltd’s integrated Mumbai power business to Adani Transmission Ltd (ATL). Following the commission’s nod, the transaction is expected to be closed by July.
Reliance Infrastructure and ATL had signed an agreement for the sale of the integrated business of generation, transmission and distribution of power for Mumbai in December last year. The total consideration value of the deal is estimated at `18,800 crore. Reliance Infrastructure will utilise the proceeds of this transaction entirely to reduce its debt. Not only will the sale help the company become debt free, it will also have `3,000 crore cash
surplus. Reliance Infrastructure has already received the approval of Competition Commission of India (CCI) and its shareholders for the deal. The matter of the sale was heard by MERC, which reserved its order on June 14. This order was finally delivered on Thursday.
This is the largest debt-reducing exercise by any corporate in the power sector. Reliance Energy’s power business is the largest private sector integrated power utility distributing power to nearly three million residential, industrial and commercial consumers in the suburbs of Mumbai, covering an area of 400 sq km. The company caters to a peak demand of over 1,800 MW, with annual revenues of `7,500 crore and stable cash flows, according to a Reliance Energy spokesperspon.
For ATL, this acquisition gives them a foothold into the power distribution business. From merely being a generation and transmission company, they now become a fully integrated power utility.