"The company has signed a non-binding Memorandum of Understanding (MOU) with MIEL and MPCL for initiating a due diligence process for the possible acquisition of a majority stake in MPCL, which is setting up a 1,050 MW (2x525 MW) coal fired thermal power plant located at Malibrahmani, Angul, Odisha," JSW Energy, meanwhile, said in a BSE filing.
JSW Energy has entered into a non-binding pact with Monnet Ispat & Energy Ltd (MIEL) for a possible acquisition of its power arm, which is setting up a 1,050 MW thermal power plant in Odisha.
"We have entered into a non-binding agreement with Monnet Ispat for due diligence for acquiring their power arm MPCL.
Due diligence will take at least forty to forty-five days and based on the outcome, the decision will be taken," Joint MD & CEO, JSW Energy, Sanjay Sagar told PTI.
On being asked about possible valuation of the company, Sagar said it will be done only after due diligence.
Monnet Ispat, which has been in talks with potential buyers for selling its power arm Monnet Power Company Limited (MPCL) with substantial liabilities, could not be reached out in this connection.
"The company has signed a non-binding Memorandum of Understanding (MOU) with MIEL and MPCL for initiating a due diligence process for the possible acquisition of a majority stake in MPCL, which is setting up a 1,050 MW (2x525 MW) coal fired thermal power plant located at Malibrahmani, Angul, Odisha," JSW Energy, meanwhile, said in a BSE filing.
In a separate filing, Monnet Ispat also said, "The company has signed non-binding memorandum of understanding (MoU) with JSW Energy Ltd for entering into discussion to sell majority and controlling stake of its subsidiary,
MPCL which is engaged in the business of developing 1,050 MW (2x525 MW) coal-fired thermal power plant located at Malibrahmani, Angul, Orissa." The development comes amid media reports that MIEL is in talks with potential buyers, including Adani and JSW Group, for selling stake in MPCL, which has significant liabilities.
Sources said JSW could acquire MPCL for about Rs 3,000 crore. However, this could not be confirmed.
Earlier, JSW Energy had said that as part of its growth strategy, the company keeps on looking and evaluating opportunities for growth, both organically and inorganically.
MIEL has been an Independent Power Producer (IPP) through its subsidiary Monnet Power Company Limited (MPCL) by setting up a thermal power plant of IPP of 1,050 MW, backed with pit head captive coal mine in Angul, Odisha.
The company claims that the project will be amongst one of the lowest cost generation units.
It is also setting up additional super critical 660 MW power plant at the same site and is fully equipped in terms of the land requirement and fuel for the same.
As per sources, the proposed sale aims at reducing debt of Monnet Power.
The company's annual report has said, "challenges of delayed disbursals, late approvals and... land acquisition in the beginning resulting in time and cost over-run of the project. The revised cost of project is pegged at Rs 7,117 crore instead of Rs 5,092 crore earlier."
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