In a bid to become debt-free, Anil Ambani-owned Reliance Infrastructure has reportedly entered into a Definitive Binding Agreement with Adani Transmission to sell its Mumbai power business for Rs. 18,800cr.
Reliance Infra would initially receive Rs. 13,251cr and the rest after certain regulatory issues are resolved, said Reliance Infrastructure's CEO Lalit Jalan.
The deal is expected to be closed by Mar'18.
In a statement, Reliance Infra said the total value of the deal is Rs. 13,251cr, comprising the Rs. 12,101cr business and Rs. 1,150cr-worth regulatory assets approved so far.
It added, "In addition, regulatory assets under approval estimated at Rs. 5,000cr and net working capital on closing estimated at Rs. 550cr will flow directly to RInfra."
Therefore, the estimated total consideration value is Rs. 18,800cr.
The Mumbai power unit of Reliance Infrastructure (formerly known as Reliance Energy) is reportedly the largest private sector integrated power utility in India. It distributes power to about three million residential, commercial, and industrial consumers in the Mumbai suburbs.
According to Reliance Infrastructure, the company plans to use the proceeds from the Mumbai power unit sale to pare its massive debt. It would also become a debt-free company eventually and even about Rs. 3,000 crore cash-surplus.
The Anil Ambani-headed company also said it would primarily focus on other upcoming asset-light opportunities in engineering, defense, and procurement and construction businesses.
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