JSW Energy has terminated plans to acquire GMR Kamalanga Energy five months after announcing the deal, citing uncertainties in the wake of the Covid-19 pandemic and subsequent lockdown.
The Sajjan Jindal-led utility had announced in February its plans to buy the 1,050 megawatts (mw) Kamalanga project located in Odisha for Rs 5,321 crore from the highly indebted GMR Group.
“The long stop date for the proposed acquisition of 100% stake in GMR Kamalanga Energy from GMR Energy has elapsed. Given the continued uncertainty due to Covid-19 pandemic, the parties have mutually agreed to terminate the said transaction,” JSW notified bourses on Friday.
At 3 PM, shares of GMR Infrastructure were trading at Rs 21.60, down 2.7% from previous close on the Bombay Stock Exchange. JSW energy was at Rs 45.80, down 0.65%. The BSE benchmark index BSE was 0.4% lower than its previous close.
In May, ET had reported, that the acquisition plan was put on hold due to uncertainties. The deal would have helped GMR pare debt, and added capacity to JSW’s portfolio.
Several stressed power assets have been scouting for buyers after insolvency rules were relaxed in April last year. Some of these assets were also looking at resolutions outside the Insolvency and Bankruptcy Code (IBC) framework, but the Covid-19 pandemic has disrupted this process.
Separately, JSW Energy on Wednesday reported a consolidated net profit of Rs 219.56 crore in the firs quarter of 2020-21, as against Rs 237.27 crore a year ago. Consolidated total revenue for the quarter ended June was Rs 1,886.78 crore, down from Rs 2,463.99 crore in the previous year’s quarter.
Source: Economic Times