India Grid Trust (IndiGrid) has announced the execution of the SPA (Share Purchase Agreement) for acquisition of 100 per cent stake in Jhajjar KT Transco Private Ltd from Kalpataru Power Transmission Ltd and Techno Electric & Engineering Company Ltd.
The indicative value of the transaction is Rs.310 crore and is subject to certain adjustments on account of assets and liabilities at the time of closing of the transaction. The transaction is also subject to requisite approvals and compliances.
JKTPL is an operational intra state asset awarded on a Design-Build-Finance-Operate and Transfer (“DBFOT”) basis, with a contractual period of 25 years and a provision of further 10-year extension. It consists of three 400kV transmission lines spread across 103 km in Haryana with two substations with a transformation capacity of 830 MVA.
Also See: KPTL to divest stake in Jhajjar KT Transco to IndiGrid
The project has been operational for eight years with a robust collection track record and receivable cycle of less than a month. It is a strategic asset for Haryana state distribution companies and the key evacuation transmission system from the 1,320-mw thermal power plant in Jhajjar.
For IndiGrid, this is the second transaction with Techno Electric Engineering after the acquisition of Patran Transmission Company in 2018.
This transaction with KPTL and TEECL also reinforces the opportunity to grow the IndiGrid portfolio through value accretive acquisitions of quality transmission assets. It is also the second transaction with TEECL, after acquisition of Patran Transmission Company Ltd in August 2018.
Commenting on the acquisition, Harsh Shah, Chief Executive Officer of IndiGrid, said “This acquisition is in line with our strategy to acquire accretive operational assets with long term and stable cash flows thereby growing returns for unitholders. I am very pleased to deepen our existing relationship with Techno Electric as well as initiate our relationship with Kalpataru, both reputed EPC companies and developers of infrastructure assets in India.
Apart from third party opportunities available in the Indian transmission sector IndiGrid has another Rs.65 billion pipeline of transmission projects under the framework agreement with Sterlite Power providing visibility of Rs.180 billion of AUM (assets under management) over next two years.”
The acquisition of Jhajjar KT Transco is expected to be consummated over next couple of months and is subject to customary closing adjustments and regulatory approvals, will be funded through a combination of debt and internal accruals. IndiGrid’s portfolio will increase to 10 power transmission projects with a total network of 23 power transmission lines that span more than 6,000 circuit kilometers across 14 states post this acquisition.
Also See:
Exclusive interview with Harsh Shah, CEO, IndiGrid (January 2020)
(Featured photograph is for representation only)
