The Ruia family-owned Essar Power Ltd has entered into an agreement to sell its 400kV Mahan-Sipat transmission line to Adani Transmission Ltd (ATL) for Rs 1,913 crore.
"ATL has signed definitive agreements with Essar Power Ltd for acquiring 673 ckt km (circuit kilometre) operational inter-state transmission project owned and operated by Essar Power Transmission Ltd (EPTL)," the Adani Group company said on June 3.
The enterprise value for the transaction is Rs 1,913 crore, the statement said.
The asset that is being sold by Essar Power is an inter-state transmission line linking Mahan in Madhya Pradesh to Sipat pooling substation in neighbouring Chhattisgarh with a line length of 673 ckt km.
The project operates under the Central Electricity Regulatory Commission (CERC)-regulated return framework and was commissioned on September 22, 2018.
Also Read | Adani Power completes acquisition of Essar's 1,200 MW Mahan project in MP
ATL Managing Director and CEO Anil Sardana said the acquisition of Essar’s transmission asset will consolidate the company’s "presence in central India".
"With this acquisition, ATL is well on path to achieve its 20,000 ckt kms target before time," Sardana added.
This acquisition is expected to expand ATL's cumulative reach to 19,468 ckt km, of which 14,952 ckt km is operational and 4,516 ckt km under various stages of execution.
For Essar Power, the deal will complement its efforts in reducing the company's debt. In the last three years, Essar Power has lowered its debt to Rs 6,000 crore, from a peak level of approximately Rs 30,000 crore.
The company is also planning to invest in green and renewable energy.
“With this transaction, Essar Power is rebalancing its power portfolio with the twin objective of deleveraging its balance sheets and investing in green and renewable power, thereby furthering its ESG-oriented future growth," Essar Power CEO Kush S said
The company had a power generating capacity of 2,070 MW across four plants in India and Canada.
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