The acquisition is expected to help the company expand its offerings and operations in the thermal power sector in Chhattisgarh.
Adani Power announced on August 19 that it will acquire DB Power Limited, which owns and operates a running 2×600 MW thermal power plant at District Janjgir Champa in Chhattisgarh, for Rs 7,017 crore. The acquisition is expected to help the company expand its offerings and operations in the thermal power sector in Chhattisgarh.
Adani Power has informed the stock exchanges that the acquisition does not fall within related party transactions and the promoter/ promoter group has no interest in DB Power.
Notably, the proposed transaction is subject to receipt of approval from the Competition Commission of India and any other approvals as may be identified following the due diligence exercise to be conducted with respect to DPPL and DB Power.
According to the exchange filing, “The initial term of the MOU shall be till October 31, 2022, which may be extended by mutual agreement”. Adani Power will have shareholding control over “100 percent of the total issued, subscribed and paid-up equity share capital and preference share capital of DPPL” while DPPL will hold 100 percent of the total issued, subscribed, and paid-up equity share capital of DB Power on the closing date.
The turnover of DB Power during the last three financial years is Rs 3,488 crore (for FY 2021-22), Rs 2,930 crore (for FY 2020-21), and Rs 3,126 crore (for FY 2019-20), respectively. It is engaged in the business of establishing, operating, and maintaining thermal power generating stations. It has long and medium-term power purchase agreements for 923.5 MW of its capacity, backed by fuel supply agreements with Coal India Limited, and has been operating its facilities profitably. The company was incorporated on October 12, 2006, within the jurisdiction of the Registrar of Companies, Gwalior. Diliigent Power Private Limited (DPPL) is the holding company of DB Power and has a turnover of Rs 0.19 crore for FY 2021-22.