Home ECONOMY JSW Energy inks MOU for Monnet Ispat takeover in Odisha

JSW Energy inks MOU for Monnet Ispat takeover in Odisha

0
SHARE

Odisha Sun Times Bureau
Bhubaneswar, Jul 11:   

JSW Energy on Thursday announced that it has signed of a non-binding agreement with Monnet Ispat for entering into discussion to sell majority and controlling stake of its subsidiary, Monnet Power Company Limited (MCPL)’s power plant at Malibrahmani in Odisha’s Angul district.

JSW EnergySpeaking to a private TV channel, Sanjay Sagar, CEO of JSW Energy said that due diligence acquisition will take 45-60 days for completion. The power plant is under construction and will be completed in 18 months. Also, JSW Energy will decide on share and valuation only after due diligence process is complete. The proposed sale aims at reducing debt of Monnet Power.

MCPL is developing 1050 MW (2 x 525) Coal fired thermal power plant in Angul.

“We are looking at inorganic growth very aggressively and this is just one of the projects which we found attractive. We are currently evaluating a few projects, are likely to conduct due diligence for 5-6 projects, and may decide to acquire 2-3 projects,” Sagar said.

As per Sagar, the stake in Monnet Power will be “fairly higher” than a controlling stake i.e. above 51 percent. As per sources, JSW might pick up over 87 percent stake in Monnet Power for Rs 3,500 crore. However, this could not be confirmed.

So far, JSW Energy has sought shareholder’s approval to raise up to Rs 5,000 crore through equity issuance for inorganic growth opportunities and is comfortable with leverage of 2.5 times.

JSW’s energy capacity stands at 3,140 Mw. In September 2014, it had signed an MoU with Jaiprakash Power Ventures to acquire 1,891 Mw of power assets. The agreement covered three plants — the 300-Mw Baspa stage-II plant, the 1,091-Mw Karcham Wangtoo plant (both hydro power plants) and the 500-Mw Bina thermal power plant.