India based power producer Tata Power Renewable Energy has signed an agreement to acquire Welspun Renewables Energy for Rs92.49bn ($1.37bn).
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With the deal, the Welspun’s assets would complement Tata Power’s 294MW of renewable power capacity and about 400MW of solar and wind projects which are now under construction.
TPREL now operates 294 MW of renewable power capacity and about 400 MW of solar and wind projects are under implementation.
Tata Power’s acquisition of Welspun Renewable Energy can negatively impact the former’s credit metrics, which are already tight at the current rating level, Moody’s Investors Service said today. This includes about 990MW of solar projects and about 150MW of wind generation assets.
Speaking on achieving this milestone, Anil Sardana, CEO & Managing Director, Tata Power, said, “The Company is pursuing growth in Renewable Energy space to create value for its shareholders through various organic and inorganic growth opportunities”. Welspun Renewable Energy Pvt is a subsidiary of Welspun Energy.
The transaction is pending some consents and is expected to be wrapped up in about two months.
Barclays acted as exclusive financial advisor and Cyril Amarachand Mangaldas acted as legal advisors to WEPL for this transaction. Problems with acquiring land, lack of clarity in government policies, creaky transmission network and cash-starved state distributors all weigh on the sector’s growth, say analysts.
Tata Power and Welspun Renewables officials were not immediately available to comment on the deal value outside working hours and the companies did not respond to an email request for comment.
In another significant transaction, Gautam Adani-led Adani Power Ltd bought Avantha Power & Infrastructure Ltd’s 600 MW thermal power project Korba West Power Co Ltd for an enterprise value of Rs 4,200 crore ($680 million then).
In April, the first month of the new financial year, electricity generation rose at the fastest pace in more than a year, at 14.6%.
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On the other hand, the government has set ambitious targets for renewable energy business in the country.
