Reliance Infrastructure on Thursday said its shareholders have approved the sale of its Mumbai power business to Adani Transmission in a deal valued at Rs 18,800 crore, PTI reported. “The resolution has been passed with 94% votes in favour of the proposal,” the company said in a statement.
The Anil Ambani-led group said it will sell 100% stake of its debt-ridden power business. Reliance Infrastructure and Adani Transmission had signed a definitive binding agreement in December 2017. “Transaction is expected to be completed by March 2018, subject to approvals,” the statement said. The fair trade regulator Competition Commission of India had approved the sale in February.
Reliance Infrastructure said the business has been valued at Rs 12,101 crore and regulatory assets at Rs 1,150 crore. The company will also fetch regulatory assets approved by the Maharashtra Electricity Regulatory Commission worth Rs 5,000 crore and another Rs 550 crore from net working capital. The total consideration of the deal will be Rs 18,800 crore.
Reliance Infrastructure said it will utilise the proceeds to reduce its debt. “This is the largest ever debt-reducing exercise by any corporate,” said the company. “This monetisation is a major step in Reliance Infrastructure Limited’s deleveraging strategy for future growth.”
The share purchase agreement will allow Adani Group to take over the generation, transmission and distribution of power of more than 1,800 MW electricity catering to nearly three million residential, industrial and commercial consumers in Mumbai and its suburbs.