The part-sale of promoters’ stake in Anil Ambani-led Reliance Power is expected to fetch around ₹2,500 crore. The promoters are planning to sell 18-19 per cent stake out of their direct holding of 30 per cent in the company, sources close to the development said.
Reliance Power has appointed JP Morgan as the banker for the stake-sale, and several foreign funds, including Qatar Investment Authority, Abu Dhabi Investment Authority, Blackstone, TPG and KKR could be considering bidding for the stake, the sources added. Reliance Group spokesperson declined to comment on this development.
Anil Ambani-led Reliance Group had informed its lenders last week that it would be part-selling its direct shareholding in Reliance Power to institutional investors as the group is trying to generate funds to repay its debt.
Last week, the group reached an understanding with more than 90 per cent of its lenders to avoid selling any shares pledged by the promoters until September 30. This came as a breather for the group which lost ₹13,000 crore in market capitalisation earlier this month after several financial institutions belonging to Edelweiss Group, one of the lenders to Reliance Group, sold the pledged shares of Reliance Group’s listed entities leading to a crash in their share prices.
51% controlling stake
Post Reliance Power stake-sale, existing promoters will retain 51 per cent controlling stake in Reliance Power. Currently, group promoters and Reliance Infrastructure, another listed entity of the group, jointly hold over 70 per cent in Reliance Power.
Reliance Power has a total operational capacity of 5,945 MW, which includes thermal power and renewable portfolio.
The company operates 3,960-MW coal-based Sasan Ultra Mega Power Project in Madhya Pradesh, 1,200-MW coal-based Rosa Power Plant in Uttar Pradesh and 600-MW coal-based power plant at Butibori in Maharashtra and has several mega power projects. It also has few wind and PV solar projects across Maharashtra and Rajasthan.
All of its capacity is tied up in power purchase agreements (PPAs) and operated at around 85 per cent capacity which is above the national average of 63 per cent in FY18.
The company is also constructing a 750-MW combined cycle gas-based power plant in Bangladesh for which it had, in 2018, received in-principle financial sanction for $583 million from the Asian Development Bank. Reliance Power is expecting to fully close the finances for the project by end of FY19. The first phase of the project is expected to start commercial operation by March 2020.