Shares of Adani Power Ltd are in focus on Thursday morning after a wholly-owned subsidiary entered into a 20-year long-term Power Purchase Agreement (PPA) with the Mukesh Ambani-led Reliance Industries Ltd (RIL) for 500 MW under the captive user policy, as defined under the Electricity Rules, 2005.
In a BSE filing Adani Power said that one unit of 600 MW capacity of arm Mahan Energen, Mahan thermal power plant, out of its aggregate operating and upcoming capacity of 2800 MW, will be designated as the captive unit for this purpose.
"In order to avail the benefit of this policy, RIL has to hold a 26 per cent ownership stake in the Captive Unit in proportion to the total capacity of the power plant. It will accordingly invest in 5,00,00,000 equity shares of MEL, aggregating to Rs 50 crore for the proportionate ownership stake," Adani Power said.
This development brings between two corporates an exclusive arrangement for 500 MW of power purchase by Reliance Industries on long term basis. In this connection, APL, MEL, and RIL have signed an Investment Agreement on March 27 at 7 pm. Closing of the transaction is subject to customary closing conditions including receipt of requisite approvals, Adani Power said.
Meanwhile, in another filing, Adani Power said that consequent to the enhancement in the credit rating of Adani Power Limited to AA-, which followed the amalgamation of its six Special Purpose Vehicles (“SPVs”) with itself, the Ani group firm has consolidated the standalone term loan facilities of the SPVs into a single long-term Rupee term loan facility of Rs 19,700 crore under a consortium financing arrangement comprising eight lenders.
"The revised arrangement will allow the company to benefit from uniform terms and greater financial flexibility in addition to reducing the effective rate of interest," it said.