Deal will bolster Adani’s presence in central India, help it achieve its 20,000 circuit km target before time
Essar Power | Adani Transmission | Adani Group
Essar Power, an independent power producer, has entered into a definitive agreement with Adani Transmission to sell one of its two transmission lines at an enterprise valuation of Rs 1,913 crore.
Essar Power Transmission Company (EPTCL) has 465-km transmission lines across three Indian states. The asset sold by the Essar group is an operational 400 kV inter-state transmission line linking Mahan power station in Madhya Pradesh to Sipat in Chhattisgarh pooling substation. The project operates under the CERC regulated return framework.
“The acquisition of Essar’s transmission asset will consolidate ATL’s presence in central India. With this acquisition, ATL is well on path to achieve its 20,000 ckt km target before time. We continue to remain at the forefront of grid stability and provide sustainable, reliable, and affordable energy solutions while creating long term sustainable value for our stakeholders,” said Anil Sardana, MD & CEO, Adani Transmission.
The acquisition is in line with ATL’s value added growth strategy through organic as well as inorganic growth opportunities. With this acquisition, the cumulative network of ATL will reach 19,468 ckt km, of which 14,952 ckt km are operational and 4,516 ckt km are under various stages of execution.
Further, with this scale of operations, ATL will derive synergies in terms of O&M cost optimisation and shared resources. The deal will also fortify its position of being the largest private sector transmission and distribution company in the country
The sale is part of Essar group’s plan to reduce its debt across group companies. During the past three years, Essar Power has reduced its debt from a peak level of about Rs 30,000 crore to Rs 6,000 crore. Alongside this, Essar Power has been in the process of curating a green balance sheet around renewable energy which is in line with Essar’s strategy of investing in future-centric businesses which give a superior rate of return within the ESG framework.
“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 has a current power generating capacity of 2,070 MW across four plants in India and Canada,” said Kush S, CEO of Essar Power.
This is a part of deleveraging strategy following which Essar has repaid over Rs 1,80,000 crore to banks and financial institutions in the last three years; the largest debt repayment in the history of corporate India, said a company official.
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