If completed, the acquisition would have raised JSW Energy’s total installed power generation capacity to 5,609 MW.
Sajjan Jindal-promoted JSW Energy
on Wednesday said it had put the acquisition of GMR
Kamalanga on hold. The company cited the on-going uncertainty as the reason.
In February, JSW Energy
said it would acquire GMR’s Kamalanga power project (1,050 Mw) in Odisha for Rs 5,321 crore. In February, in a notice to exchanges, JSW said it had entered into a ‘share purchase agreement’ with GMR
Energy for acquiring 100 per cent shares in its subsidiary GMR
“The transaction has been put on hold given the ongoing uncertainty and will be revisited once the situation normalizes,” JSW Energy
said in a press statement on Wednesday. Kamalanga is one the 36 identified stressed power assets that was undergoing debt resolution. The project ran into trouble because of a lack of coal supply. The project cost for the plant is estimated at Rs 6,519 crore. The plant has three power purchase agreements (PPAs) with Grid Corporation of Odisha (GRIDCo), Haryana Utilities, and Bihar state utility.
If completed, the acquisition would have raised JSW Energy’s total installed power generation
capacity to 5,609 MW.
Commenting on Covid-19 and its impact, JSW Energy, in its statement, said, “Power demand over the short term is expected to be muted attributable to subdued economic activity due to the ongoing COVID-19 situation.” The statement further added, “There have been major disruptions in supply chain and logistics including disruptions in billing and collections for Discoms.
In the short term, volumes and tariffs at merchant markets are expected to be adversely impacted due to a lackluster demand scenario.”
The company expects increased consolidation in the sector with several stressed power assets available for acquisition.
“However, the pace of resolution of Covid-19 related issues, prompt realization of discom receivables, volatility in imported coal prices and merchant tariffs, and domestic coal availability especially for private sector power plants continue to remain key concerns for the sector,” the company said.