Adani monetises power asset
Nearly 16 months after it acquired the business from Anil Ambani, the Adani group on Wednesday has cashed in on part of its holding in Adani Electricity Mumbai Ltd (AEML).
Qatar Investment Authority (QIA) will be acquiring a 25.1 per cent stake in AEML, which distributes power in Mumbai. The transaction also includes a “subordinate debt investment” by QIA in AEML.
A statement from the Adani group said the total QIA investment in AEPL will be Rs 3,200 crore.
The deal values AEPL at almost Rs 12,750 crore. In August last year, the Adani group and Reliance Infrastructure had completed a Rs 18,800-crore transaction under which the Ambani group firm sold its energy business in the city that included generation, distribution and transmission to Adani Transmission Ltd (ATL).
AEML is the 100 per cent subsidiary of ATL, which is the transmission and distribution business arm of the Adani group.
AEML, which serves over 3 million consumers in Mumbai and its suburbs, is also into power generation and transmission. QIA is the sovereign wealth fund of the state of Qatar.
“ATL, AEML and a subsidiary of QIA have signed definitive agreements for the sale of a 25.1 per cent stake in AEML to QIA and for a shareholder subordinated debt investment by QIA in AEML. The total QIA investment in AEML will be around Rs 3,200 crore,” a statement said.
The company added that as part of the transaction, ATL and QIA have agreed on definitive plans to ensure that over 30 per cent of the electricity supplied by AEML is sourced from solar and wind power plants by 2023.
The transaction is expected to complete in early 2020, subject to the receipt of regulatory approvals and the satisfaction of precedent customary conditions.
Adani Group chairman Gautam Adani said AEPL together with Qatar Investment Authority will work towards improving the reliability of supply and consumer satisfaction. “We believe this transaction is a significant step in the journey of the Adani group, marking the start of a long-term partnership with QIA,” he observed.
Shares of Adani Transmission ended with gains of 1.74 per cent, or Rs 5.85, at Rs 342.05 on the news.
QIA chief executive officer Mansoor al Mahmoud said: “We look forward to a long-term partnership with the Adani group with whom we share a common vision for the sustainable growth and continued success of AEML.”