Reliance To Buy 26% Stake In Captive Unit Of Adani Power’s Arm For $6 Mln

Reliance Industries Ltd. agreed to acquire a 26% stake in the captive power unit of Mahan Energen Ltd., a wholly owned subsidiary of Adani Power Ltd., for 50 crore rupees ($6 million).

The proposed investment is in compliance with the provisions of Electricity Rules 2005 under which a captive user is required to own a 26% stake in one unit of Mahan Energen’s power plant, the Indian conglomerate said in a stock exchange announcement.

Reliance, which signed an investment agreement with the parties on 27 March, will acquire five crore Mahan Energen equity shares with a face value of 10 rupees each at par.

The Indian oil-telecom conglomerate will be the captive user of 500 megawatts (MW) power generation capacity of Mahan Energen’s 600-MW capacity power unit and signed a 20-year long-term power purchase agreement for this purpose.

The investment, which is subject to customary conditions and approvals, will likely conclude within two weeks after meeting such requirements.

Meanwhile, Adani Power said one unit of 600-MW capacity of Mahan Energen’s Mahan thermal power plant, out of its aggregate operating and upcoming capacity of 2800 MW, will be designated as the captive unit for the deal.

Note: $1= 83.3507 Indian rupees

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