Billionaire Sajjan Jindal’s JSW Energy Monday announced termination of Rs 6,500 crore deal with Jindal Steel and Power Ltd (JSPL) to acquire its 1,000 MW power plant in Raigarh district of Chhattisgarh.
“We now wish to inform you that with the elapsing of the Long Stop Date without completion of the stipulated conditions precedent, the proposed acquisition of the said power plant stands terminated,” JSW Energy said in a filing to the BSE.
JSW Energy had on May 3, 2016 informed the BSE that it had agreed to acquire a 1,000 MW (4×250 MW) thermal power plant located at Tamnar village in Raigarh district in Chhattisgarh from JSPL, the company said.
On June 28, 2018, JSW Energy informed BSE that as the conditions precedent were yet to be completed, it has extended the Long Stop Date from June 30, 2018 to June 30, 2019.
The proceeds of the deal would have helped JSPL pare its debt. The company’s total debt is around Rs 39,000 crore at present.
The Raigarh plant has been running at a plant load factor (PLF) or capacity utilisation of up to 60 per cent recently.
A plant running at over 50 per cent PLF can generally service its debt comfortably, an industry source said.
Besides, Jindal Power was one of the lowest bidder for supply of power for a short period (for three year) at a tariff of Rs 4.41 per unit under a pilot scheme of power ministry.
The scheme was launched to facilitate operational power plants without power purchase agreements (PPA). In the present legal framework, PPA is a pre-requisite for coal linkage.
Since the Raigarh plant is running an idle capacity and can soon improve its PLF further, the two parties may have decided to scrap the deal, the source said.
Source: Economic Times