Orient Cement says MoU with Adani Power Maharashtra stands terminated; here's why

Orient Cement on Wednesday the Mou with Adani Power Maharashtra Ltd (APML) has been terminated as the Adani Group firm wasn't able to obtain required clearances. 

In September 2021, Orient Cement announced a Memorandum of Understanding with APML for "facilitating bona fide use of land identified for exploring the possibility of establishing a cement grinding unit (CGU) at Tiroda (in Maharashtra)".

In a stock exchange filing, Orient Cement said Adani Power has requested it to not pursue with the venture further. 

Adani Power told Orient Cement it wasn't "able to obtain the required MIDC clearances for sub-leasing the parcel of land required for the CGU, due to some legal issues. Also, the timelines as agreed upon as per MoU have crossed". 

On Wednesday, Adani Power's shares closed trading 5% lower at Rs 162.45 while Orient Cement shares closed 2% lower at Rs 117.35 apiece. 

The news comes at a time when Adani Group is battling damning allegations by a US short-seller Hindenburg Research. Hindenburg alleged improper use of offshore tax havens, stock manipulation and high debt levels - allegations the Adani Group has rejected.

The conglomerate had earlier said that its companies face no material refinancing risk or liquidity issues in the near term.

This is the latest setback for Adani Power after its planned Rs 7,017-crore acquisition of coal-based electricity generating units of DB Power Ltd fell through as the deadline to complete the transaction expired without signing of the pact.

The acquisition of DB Power, which currently operates a 2x600 MW coal-fired power plant in Janjgir Champa district in Chhattisgarh, was expected to expand Adani Power's offerings and operations in the thermal power sector in the state.