Private Sector

Adani Transmission, Tata Power in talks with Essel Group to buy its power line

Adani Transmission, Tata Power in talks with Essel Group to buy its power line

Adani Transmission, Tata Power in talks with Essel Group to buy its power line

The Subhash Chandra-led Essel Group is about in conversation with Tata Power and Adani Transmission to sell its under-construction Warora-Kurnool cable in an effort to lower debt and the conversation is at preliminary stages and deal depends on many factors including valuations, state of the project and the way much haircut lenders are willing to require, as two people conversant in the company’s plans said. It has around 765 kiloVolts project, which constitutes putting transmission lines from Warora in Maharashtra and Kurnool in Andhra Pradesh, was alleged to facilitate distribution of power to the southern region. The project is quite delayed as per the timeline, for the scheduled commissioning of the project is past its November 2019 deadline.

“Essel Infra has been trying to find a buyer for this project for some time now. Though Edelweiss is not any longer interested, therefore the company is scouting for other buyers and is presently in-tuned with Adani and Tata groups, Essel Infraprojects didn’t reply to an email seeking comment. Adani Transmission and Tata Power also didn’t answer emails seeking comment.” The Warora-Kurnool line may be a big project but it’s delayed for an extended time. In fact, within the last nine months, there has been no progress within the construction, which has made it difficult to seek out a buyer as described by 2 company personals.

The cable covers the districts of Warora, Warangal, Hyderabad, Kurnool, and Chilakaluripeta with a substation at Warangal. The project was delayed more than 35 years post commissioning of the project than its actual period. it’s also unclear whether the delays in commissioning will cause any changes within the contract. In June last year, Essel Infraprojects had sold 2 transmission assets namely, Darbhanga-Motihari Transmission and NRSS XXXI (B) Transmission, to Edelweiss Infrastructure Yield Plus Fund. That agreement had given Edelweiss the proper to get two other transmission assets owned by Essel, the Warora-Kurnool Transmission and NRSS XXXVI Transmission.

However, Edelweiss is not any longer curious about these projects due to the delays in execution. Also, YES Bank and PTC India Financial Services are the lenders to the project, but it’s unclear on what proportion the corporate has borrowed out of the Rs 4,000 crore sanctioned to the Warora-Kurnool project.

For Adani and Tata, the acquisition could quicken their expansion within the country. Adani Transmission is currently the most important private transmission company operating quite 11,000 ckt km of transmission lines and around 18,000 MVA of power transformation capacity. While Tata Power has quite 1,125 ckt km of the transmission network in Mumbai, it’s sister company Tata Projects has laid quite 13,000 km of power transmission lines since its inception. The lenders also are keen that the project should be appropriated by a more capable company, which may invest to finish the project.

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