The Hindu Business Line : REL to bid for UP's five distribution cos

RELIANCE Energy Ltd will bid for five electricity distribution companies in Uttar Pradesh up for sale through a Government-initiated international bidding process.

This decision was taken by the REL board, which met on Tuesday to consider the resignations of the six directors and related issues, a company statement said here on Wednesday.

The announcement comes amid reports that the Rs 11,000-crore investment for building a 3,740-MW power generation unit in Uttar Pradesh was one of the reasons for the disagreement between Mr Anil Ambani, REL Chairman, and his elder brother Mr Mukesh Ambani, Chairman of Reliance Industries Ltd, which is a major shareholder in REL.

The Uttar Pradesh Government has reportedly kept the disinvestment of these five companies on hold till a solution to the Reliance discord is in sight.

The five power distribution companies are based in Meerut, Agra, Lucknow, Varanasi and Kanpur. They cater to around 8.5 million consumers with a peak demand of about 6,500 MW. The aggregate annual revenue of these companies is about Rs 7,500 crore, the company said.

"The current disinvestment opportunity is the first of its kind after enactment of the Electricity Act, 2003, and is in line with the reform objectives of the Uttar Pradesh Power Policy, 2003. The disinvestment is a part of an extensive reform programme undertaken by the State Government in the power sector and is supported by World Bank," it said.

The State Government has called for request for proposals to pre-qualify interested companies. The entire transaction is scheduled for completion by the end of this financial year.

More Stories on : Disinvestment | Power | Mergers & Acquisitions

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