Anil Ambani-led Reliance Infrastructure Ltd on Wednesday said it has signed a binding term sheet agreement with Adani Transmission Ltd (ATL) for sale of its transmission assets as it continues to sell non-core assets to cut debt.
The deal size was not disclosed, but a person involved in the transaction said the deal would be in excess of Rs.2,000 crore. Reliance Infrastructure said the transaction would be EPS (earnings per share) accretive for shareholders.
As part of the agreement, Reliance Infrastructure will sell its entire holding in three operational transmission assets—Western Region System Strengthening Scheme (WRSSS) B and WRSSS C projects located in Maharashtra, Gujarat, Madhya Pradesh and Karnataka, and Parbati Koldam Transmission Co. Ltd (PKTCL) located in Himachal Pradesh and Punjab.
Reliance Infrastructure owns 74% in PKTCL in joint venture with Power Grid Corporation of India Ltd (PGCIL).
All three transmission projects are completed and revenue generating; and the entire sale proceeds will be used for debt reduction, Reliance Infrastructure said in a statement on Wednesday.
“The transaction is in line with the strategic plan of monetizing non-core business and focus on major growth areas like defence and EPC business,” Reliance Infrastructure said in the statement.As on 31 March, Reliance Infrastructure had consolidated debt of Rs.25,100.81 crore.Reliance Infrastructure is looking to sell its 11 toll road assets to an overseas buyer for more than $1.5 billion.
Reliance Infrastructure in August completed the sale of its cement assets to Birla Corp. for Rs.4,800 crore. It November 2015 it had signed a non-binding term sheet to sell 49% in its Mumbai power business to the Canadian pension fund Public Sector Pension Investment Board, or PSP Investments. That deal has not yet fructified.
Monetization of roads and the Mumbai power businesses are in advanced stage, the statement on Wednesday said.
SBI Capital Markets Ltd is acting as the financial advisors to Reliance Infra for this transaction, the company said.
At 2:41pm, Reliance Infrastructure’s shares were up 1.06% to Rs.596 a share on BSE. Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.