JP Associates and JP Power sold off in trade today after the company decided to sell two hydro power assets for Rs 10,000 crore in an attempt to deleverage its balance sheet. Frank Perez, executive officer & head of global power & water at TAQA told CNBC-TV18 that company’s capacity will increase to 1800MW in India post JP deal. He expects to complete JP Power transaction later this year.
Going ahead, TAQA is keen to expand in the Indian energy sector and wants to invest in renewables and coal assets in India, he said.
Meanwhile, JP Morgan downgraded JP Power stating that the risk return trade off is no longer attractive. It has also cut the target price to Rs 19 from Rs 25, saying the implied deal equity valuation was 30 percent lower than expected at USD 616 million.
Below is the verbatim transcript of Frank Perez’s interview with CNBC-TV18's Astha Maheshwari
Q: Are you looking at making more investments in India?
A: Our overall strategy at TAQA as an energy company was to expand our business and investments in India. We currently own two plants here. The acquisition of these two hydro power projects will allow us to expand our business and add an excellent two very good quality assets – hydro assets and also bring our megawatts up to 1800 in India. We look forward to continuing to expand and invest in the energy sector and help the economic growth of India.
Q: Talking about these two assets, there has been a lot of debt per se on the companies books. Post this how much of the liabilities is going to be transferred to us also, if you could throw light on that and by when are we expecting this deal to close?
A: The agreement was for the acquisition. As normally in all acquisitions there are the customary approvals and consents that will take place. So, little bit later this year we will complete the transaction with the JP Group. We hope to do other things with them in this sector.
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