The transaction between Adani Power and RIL is in line with the captive user policy as defined under the Electricity Rules, 2005, both companies said.
Mukesh Ambani’s Reliance Industries (RIL) will buy a 26 percent stake in Mahan Energen Ltd (MEL), a unit of Adani Power led by Gautam Adani.
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The Mukesh Ambani company will invest Rs 50 crore for a 26% stake in a 600MW unit of Mahan Energen’s thermal power plant. The latter is a wholly owned subsidiary of Gautam Adani-led Adani Power.
Mahan Energen has agreed to allot 50 million equity shares of Rs 10 face value each to RIL at par, Reliance said in a regulatory filing. “The proposed investment by the company is in compliance with the provisions of the Electricity Rules, 2005,” it said. RIL did not disclose any specific purpose for signing the power purchase agreement.
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“One unit of 600 MW capacity of Mahan thermal power plant, out of its aggregate operating and upcoming capacity of 2,800 MW, will be designated as the captive unit for this purpose,” Adani Power said in a regulatory filing announcing the agreement with RIL.
MEL and RIL have entered a 20-year power-purchase agreement.
The transaction between Adani Power and RIL is in line with the captive user policy as defined under the Electricity Rules, 2005, both companies said.
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The two groups signed an investment agreement on March 27. The transaction closure is subject to customary closing conditions, including receipt of requisite approvals.
MEL has an operational capacity of 1,200 MW with plans to add another 1,600 MW.
“The investment is subject to customary conditions precedent, including receipt of requisite approvals by MEL, and is expected to be completed within two weeks of receipt of completion of conditions precedent and receipt of such approvals by MEL,” RIL said.
