Jun 28: Reliance Infrastructure Ltd (RInfra), part of the Anil Dhirubhai Ambani-owned Reliance Group, on Thursday said that the company has been approved by the Maharashtra Electricity Regulatory Commission (MERC) for the proposed 100% stake sale of its integrated Mumbai power business to Adani Transmission Ltd (ATL). Following the commission’s nod, the transaction is expected to be closed in July 2018.
Reliance Infra has already received the approval of Competition Commission of India (CCI) and its share-holders for the deal.
Reliance Infra and ATL had signed Definitive Binding Agreement for 100% stake sale of the integrated business of generation, transmission and distribution of power for Mumbai in December 2017. The total consideration value of the deal is estimated at Rs 18,800 crore.
According to the company, it will utilize the proceeds of this transformative transaction entirely to reduce its debt, becoming debt free and up to Rs 3,000 crore cash surplus.
“This is the largest ever debt reducing exercise by any Corporate. This monetization is a major step in Reliance Infrastructure Ltd deleveraging strategy for future growth. Reliance Infrastructure Ltd Mumbai Power business (known as Reliance Energy) is India’s largest private sector integrated power utility distributing power to nearly 3 million residential, industrial and commercial consumers in the suburbs of Mumbai, covering an area of 400 sq km. It caters to a peak demand of over 1,800 MW, with annual revenues of Rs. 7,500 crore with stable cash flows. Going forward, Reliance Infrastructure Ltd will focus on upcoming opportunities in asset light EPC and Defence businesses,” the company said.