Competition Commission of India gives nod to RInfra's Mumbai power biz sale

Competition Commission of India has given its approval for the proposed 100% sale of Reliance Infrastructure’s (RInfra) integrated Mumbai power business to Adani Transmission Limited.

In December, both the companies had announced signing of RInfra and ATL definitive binding agreement for 100% stake sale of Mumbai’s integrated business of generation, transmission and distribution of power at a total consideration value estimated at Rs 18,800 crore.

The total deal value is Rs 13,251 crore. In addition, regulatory assets under approval estimated at Rs 5,000 crore and net working capital on closing estimated at Rs 550 crore will flow directly to RInfra.

Post-deal, RInfra would become debt-free, with a cash surplus of up to Rs 3,000 crore.

The entire transaction is expected to be completed by March 2018. In other words, from April, Mumbai suburban residential and commercial users will get power bills from ATL.

RInfra plans to utilise the proceeds of this sale to reduce its debt. This monetisation is a major step in Rinfra’s deleveraging strategy for future growth. RInfra will focus on upcoming opportunities in asset light Engineering, Procurement and Construction as well as Defence businesses.

RInfra’s distributes power to nearly 3 million residential, industrial and commercial consumers in the suburbs of Mumbai, covering an area of 400 sq km. It caters to a peak demand of over 1,800 MW, with annual revenues of Rs 7,500 crore with stable cash flows.

Earlier this month, RInfra had moved Maharashtra Electricity Regulatory Commission to transfer its Mumbai power business and the attached licences to Adani Transmission Limited.