GMR Energy (GEL), a subsidiary of GMR Infrastructure (GIL), has entered into a definitive agreement with Adani Transmission (ATL) wherein GEL has agreed to transfer the interest in its transmission projects — Maru Transmission Services (MTSL) and Aravali Transmission Services (ATSL) — to ATL.
Currently, 74% stake in MTSL and 49% stake in ATSL will be transferred to ATL with an option to acquire the balance stakes in both the projects. The consummation of the transaction is subject to applicable approvals.
The equity consideration ascribed for the transaction, involving both the projects, is Rs 100 crore. The total value realisable for GEL could be Rs 220 crore, considering this equity consideration and the expected upside of up to Rs 120 crore from regulatory proceeds of various appeals of the assets before APTEL.
Post the consummation of the above transaction, the consolidated debt of GMR Group would be reduced. The total debt in the projects as on March 31, 2016, is Rs 324 crore.
GMR Energy was awarded two transmission projects on BOOM basis in 2010. MTSL operates 270 Km of 400 KV/ 220 KV transmission lines in Rajasthan. The project had achieved COD in 2013.
ATSL operates 96 km of 400 KV KV transmission line in Rajasthan. The project had achieved COD in 2014. All the three distribution companies of Rajasthan (discoms) are the beneficiaries of the transmission services being provided by these transmission SPVs.
The transmission assets (MTSL and ATSL) form a part of the excluded group of assets from the Tenaga transaction.
GBS Raju, business chairman — energy, GMR Group, said: “GMR Group continues on its path of Asset Light Asset strategy. The deal will release further liquidity and deleverage the GMR balance sheet. The asset sale done at challenging market environment further signifies GMR’s ability to create value for its stakeholders.”
Adani Transmission (ATL) signed a definitive agreement with GMR Energy for the acquisition. There is an option to acquire 100% in a manner consistent with Transmission Service Agreement and applicable consents, Adani said in a statement.
Aravali Transmission Service Company (ATSCL) operates 400 KV S/C Hinduan-Alwar transmission line (96 km) and 2X315 MVA, 400/220 KV grid substation at Alwar and other associated works in Rajasthan. The project was awarded on BOOM basis and commissioned in July 2014 and since then has been in successful operation.
Maru Transmission Service Company (MTSCL) operates 400 KV S/C Bikaner-Deedwana Transmission Line which is approximately 129 km long, 400 KV S/C Ajmer-Deedwana Transmission Line of 106 km; 220 KV D/C Sujangarh-Deedwana Transmission Line of 30 km and 2X315 MVA, 400/220 KV grid sub-station at Deedwana and other associated works in Rajasthan. The project was commissioned in December 2013 and since then has been in successful operation.
Both the assets are operating at an average availability of more than 99.90% since COD.
These assets were awarded through a Tariff Based Competitive Bidding Process with licence period of 25 years, further extendable by 10 years. ATL is developing another transmission line from Suratgarh to Bikaner in Rajasthan, in close proximity to these assets.
Gautam Adani, chairman of Adani Group, said: “Adani Transmission is foreseeing significant growth in the transmission sector and expects to maintain its leadership position in the country. This acquisition is in sync with the long-term strategy of ATL wherein we are always looking to create value for our stakeholders.”
Adani Transmission is the largest power transmission company, operating in the private sector in India and owns, operates and maintains around 5,000 Ckt Kms of transmission lines ranging from 400 KV to 765 KV, with a total transformation capacity of more than 12,000 MVA. ATL has four fully operational transmission systems that primarily serve the northern and western regions of India and is also constructing additional projects of around 1900 Ckt Kms in Rajasthan, Chhattisgarh, Madhya Pradesh, Maharashtra, Jharkhand and Bihar, which was awarded through Tariff Based Competitive Bidding process. With completion of all ongoing projects and completion of this acquisition, the network is expected to increase from around 5000 Ckt Kms to 7300 Ckt Kms and will remain a bellwether as far as private transmission in India is concerned.