Sajjan Jindal-led JSW Energy on Monday said it has cancelled a deal it had inked three years ago with Naveen Jindal-led Jindal Steel & Power to acquire its 1,000-megawatt thermal power plant in Chhattisgarh.
On May 3, 2016, JSW Energy had agreed to acquire the 1,000MW (4x250 MW) thermal power plant located at Village Tamnar, District Raigarh in the state of Chhattisgarh from Jindal Steel and Power Limited (JSPL) for Rs 6,500 crore.
JSW Energy was expected to pay at least Rs 4,000 crore, excluding net current assets, and an additional Rs 2,500 crore following the completion of the deal.
The deal was expected to be completed by June 30, 2018, but the companies failed to finalise it by then and so extended the deadline to June 30, 2019.
"We had informed that as the conditions precedent were yet to be completed, it was decided to extend the Long Stop Date from June 30, 2018 to June 30, 2019," the power generation arm of the $13-billion Sajjan Jindal group said in a filing to the Bombay Stock Exchange.
The company further stated that following the "elapsing of the Long Stop Date without completion of the stipulated conditions precedent, the proposed acquisition of the said power plant stands terminated".
According to a PTI report, JSPL has a debt of around Rs 46,000 crore and is facing financial crisis due to cancellation of its coal mine lease by the Supreme Court coupled with weak global commodity prices. The Naveen Jindal-owned company was expecting to use the fund outlay to meet its liabilities.
"As part of monetisation plans already advised, JSPL has been looking to generate cash flows from select divestments to be in much stronger position to meet all its liabilities and emerge as financially strong and sustainable company in 2016-17," JSPL had said on the deal.
Jindal Power Limited, a subsidiary of JSPL, has a 4x250 MW plant in Raigarh and a 2,400 MW thermal plant in Tamnar, Chhattisgarh.
Edited by Chitranjan Kumar