Sajjan Jindal-led JSW Energy has terminated the proposed acquisition of the 500 mw-Bina Power from Jaiprakash Power Ventures after months of delay in getting necessary approvals from lenders.
JSW has announced in 2015 that it will acquire the Bina plant in a deal valued at Rs 2,700 crore. But the lenders of the project did not give the needed approvals. ET has exclusively reported in July, quoting JSW Energy’s Chief Executive Officer Prashant Jain, that the company was on the verge of calling off the deal.
“With the elapsing of the Long Stop Date, the proposed acquisition of the Bina project stands terminated,” JSW Energy informed bourses on Monday.
In May, JSW Energy had said that the ‘Long Stop Date’, or the indicative time period for completion of the acquisition, was extended to December 31 from May 31.
Jaiprakash Power’s power plants were faced with issues plaguing the power sector like delays in signing power purchase agreements, low power offtake by state-run power distribution, and fall in merchant power rates. With huge debt and muted cash flows, the company was unable to repay its loans on time. The lenders of the company invoked strategic debt restructuring (SDR) soon after the company had announced its decision to sell its Bina power plant.
In February this year, Jaiprakash Power received shareholders’ approval for debt restructuring. Subsequently, the company allocated 305.80 crore equity shares to its lenders as part of debt restructuring scheme, aimed at reducing the debt of Rs 3,058 crore.
Following the allotment, financial institutions own majority 51% stake in the company, thereby also owning majority stake in the Bina power plant.
JSW Energy is in the process of closing that deal before its scheduled deadline of June 30, 2018. Read More