JVPL has a hydropower asset base -- three plants with an asset life of 50 years -- worth a little over Rs 10,000 crore (Rs 100 billion) and with a cumulative capacity of 1,800 Mw.
Jaiprakash Associates, of which JPVL is a subsidiary, is the flagship company of Jaypee Group.
On Sunday, it said in a statement it intended to ‘utilise the entire proceeds of the proposed transaction to reduce its outstanding debt, and thereby deleverage its consolidated balance sheet’.
An R-Power statement said: “Reliance CleanGen has signed a memorandum of understanding with JVPL for acquisition of its entire hydroelectric power portfolio.” SBI Capital Markets was the advisor for this transaction.
R-Power, which had a total debt of Rs 1,877 crore (Rs 18.77 billion) on its books as of March 2013, refused to divulge how it planned to finance this deal.
The company had reported a net profit of Rs 244 crore (Rs 2.44 billion) on a total income of Rs 1,811 crore (Rs 18.11 billion) for the June quarter of this financial year.
The development comes only three days after Abu Dhabi National Energy Company, or TAQA, pulled out of an agreement to acquire two of JPVL’s hydropower plants, valued at Rs 9,689 crore (Rs 96.89 billion).
Jaypee Group has been selling assets to reduce its high debt -- it had Rs 28,164 crore (Rs 281.64 billion) of debt on its book as on March 31. Its interest cost for 2013-14 almost doubled to Rs 6,094 crore (Rs 60.94 billion) from Rs 3,134 crore (Rs 31.34 billion)
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