Sajjan Jindal-controlled JSW Energy has signed a deal to acquire two hydroelectric power projects of Jaiprakash Power Ventures in Himachal Pradesh.
JSW Energy has issued a statement saying it "has agreed to acquire from Jaiprakash Power Ventures and other shareholders 100-per cent stake in Himachal Baspa Power company for a base enterprise value of Rs 9,700 crore."
The Board of directors of Jaiprakash Power has approved the transfer of 300 MW of Baspa II hydroelectric project and 1,091 MW Karcham Wangtoo hydro project into a separate company- Himachal Baspa Power company, the statement added.
In the financial year ended March 2014, the Karcham project had earned a revenue of Rs 1,242 crore while the Baspa project had earned Rs 320 crore.
The acquisition will make JSW Energy the largest private sector hydropower generator in the country. After the acquisition, the aggregate installed power generation capacity of JSW Energy will go up to 4,531 MW.
The acquisition will yield immediate cash flow and is expected to enhance JSW Energy's consolidated profitability and returns and create significant synergies, the statement said.
Axis Capital and SBI Capital Markets acted as financial advisers. The Noida headquartered Jaypee Group was looking to sell the hydro projects to cut its nearly Rs 12,000-crore debt.
Earlier, JPVL and Anil Ambani-run Reliance Power had been in talks for two months before calling off the deal.
The Jaypee Group promoted by the Gaur family is a real estate and infrastructure conglomerate that had set up cement factories as well to back its construction activities.
However, the company has piled up a huge debt which it is now keen to reduce.