Reliance Infra to Sell it's Mumbai Power Business to Adani Transmission for Rs 18,800 Crore

In a major debt-reducing exercise, Reliance Infrastructure Ltd (Reliance Infra) plans to sell its 100 percent stake in integrated Mumbai power business to Adani Transmission Ltd (ATL) at an estimated Rs 18,800 crore, following an approval given it to it by the state-run Maharashtra Electricity Regulatory Commission (MERC) to the proposed deal.

“Following the MERC’s nod, the transaction is expected to be closed in July 2018. MERC had concluded its hearing into the matter and reserved its order on June 14, 2018,” a Reliance Infra spokesperson said.

“Reliance Infra has received the approval of Competition Commission of India (CCI) and its share-holders. The total consideration value of the deal is estimated at Rs 18,800 crore,” the spokesperson said.

Reliance Infra and ATL had signed Definitive Binding Agreement for 100% stake sale of the integrated business of generation, transmission and distribution of power for Mumbai in December 2017.

Reliance Infra will utilize the proceeds of this transformative transaction entirely to reduce its debt, becoming debt free and up to Rs 3,000 crore cash surplus.

“This is the largest ever debt reducing exercise by any Corporate. This monetisation is a major step in Reliance Infrastructure Ltd. deleveraging strategy for future growth,” the company spokesperson said.

Reliance Infrastructure Ltd, Mumbai Power business (known as Reliance Energy) is India’s largest private sector integrated power utility distributing power to nearly 3 million residential, industrial and commercial consumers in the suburbs of Mumbai, covering an area of 400 sq km.

It caters to a peak demand of over 1,800 MW, with annual revenues of Rs. 7,500 crore with stable cash flows. Going forward, Reliance Infrastructure Ltd. will focus on upcoming opportunities in asset light EPC and Defence businesses.

Reliance Infra is one of the largest infrastructure companies, developing projects through various Special Purpose Vehicles (SPVs) in several high growth sectors such as Power, Roads and Metro Rail in the Infrastructure space and the Defence sector.

Reliance Infra is also a leading utility company having presence across the value chain of power businesses i.e. Generation, Transmission, Distribution and Power Trading. Reliance Infrastructure Ltd through its SPVs has executed a portfolio of infrastructure projects such as a metro rail project in Mumbai on build, own, operate and transfer (BOOT) basis; eleven road projects with total length of about 1,000 kms on build, operate and transfer (BOT) basis.

Apart from providing Engineering, Procurement and Construction (EPC) services for developing power and road projects, Reliance Infra has entered into the defence sector. The Maharashtra Government has allotted land at Mihan near Nagpur for the development of India’s first smart city for the defence sector known as Dhirubhai Ambani Aerospace Park (DAAP).