BackRegulatory uncertainty may delay Reliance Power-Jaypee deal
JPVL has withdrawn its application before CERC pertaining to interim tariff for electricity generated from Karcham Wangtoo hydro project
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New Delhi: The proposed sale of Jaypee group’s hydel assets to Reliance Power Ltd in an estimated ₹ 12,000 crore deal may get delayed due to regulatory uncertainties over tariff issues related to 1,000 MW Karcham Wangtoo hydro project—one of the three projects being sold.
In one of the biggest deals in the power space, Anil Ambani Group firm Reliance Power in July had announced that it had signed an initial agreement to acquire all the three hydroelectric power plants of Jaiprakash Associates. The deal would be worth about ₹ 12,000 crore.
People familiar with the matter said that Jaiprakash Power Ventures Ltd (JPVL) has withdrawn its application before the Central Electricity Regulatory Commission (CERC) pertaining to interim tariff for electricity generated from Karcham Wangtoo hydro project and this could delay the deal.
When contacted, Reliance Power declined to comment, while there was no response to queries sent to Jaypee group.
JPVL, which is a part of Jaypee Group, is expected to file a new application for final tariff before CERC.
This project is part of the proposed deal with Reliance Power.
People familiar with the matter said that regulatory uncertainty over the Karcham Wangtoo project, pertaining to tariff charged for electricity produced from the plant, could delay the deal since major chunk of the transaction pertains to debt.
The ₹ 12,000-crore deal includes ₹ 9,500 crore in debt and ₹ 2,500 in equity.
According to sources, the tariff uncertainty could adversely impact Jaypee Group’s financials and debt reduction plans.
Reliance Power has sued HT Media Ltd, publisher of Mint, in the Bombay high court over a 12 May 2010 front-page story in Mint that it disputed. HT Media is contesting the case.
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