Sajjan Jindal to buy Naveen’s 1,000 MW plant for Rs 6,500 cr

New Delhi, May 4

Billionaire Sajjan Jindal’s JSW Energy will acquire a 1,000 MW power plant from his younger brother Naveen-led heavily indebted Jindal Steel and Power Ltd for Rs 6,500 crore.

JSW will pay at least Rs 4,000 crore, excluding net current assets, and an additional Rs 2,500 crore if JSPL’s 1,000 MW power plant in Raigarh, Chhattisgarh secures a long term power purchase agreement, the firms said.

Sajjan and Naveen, sons of billionaire Savitri Devi Jindal, once competed to buy foreign assets, but JSPL has run into rough weather with Supreme Court cancelling its coal mine allocations and weak global commodity prices.

JSPL, which has a debt of close to Rs 46,000 crore, said the deal, to be completed by mid-2018, would help meet its liabilities while JSW gained a foothold in coal-rich Chhattisgarh.

JSW would also extend Rs 500 crore as advance against interest. The sale is expected to be completed by June 30, 2018.

The buyout by JSW comes close on the heels of its acquisition of Jaiprakash’s 1,391 MW hydropower plants. JSW is also said to be in talks to acquire Jaiprakash’s 500 MW thermal plant in Madhya Pradesh and Monnet Ispat & Energy Ltd’s 1,050 MW power plant in Odisha.

These buyouts would help JSW to expand its power portfolio to a planned 11,500 MW.

“The adverse operating environment within power sector in the country is driving distress sales in the sector, and JSW Energy’s robust financial health coupled with a strong balance sheet is providing the company an opportunity to acquire quality power assets at reasonable valuations...” JSW said.

JSW said the buyout would be done through a special purpose acquisition entity, Everbest Steel and Mining Holdings Ltd.

Also, the acquisition would fall with the provisions of related party transaction as Sajjan and Naveen are related.