Adani Power’s Rs 7,017-crore acquisition deadline of DB Power expires

Adani Power’s planned Rs 7,017 crore acquisition of DB Power has failed as the deadline to complete the transaction expired. In a filing, the company said that the long-stop date under the Memorandum of Understanding (MoU) has expired.

The companies had signed an agreement on August 18, 2022, according to which the initial term of the MoU was till October 31, 2022. However, on October 31, the deadline was changed by the companies to November 30. On November 30, the deadline was pushed to December 31, and subsequently to January 15 and then February 15.

This development comes after Hindenburg Research released a damning report on the Adani Group, accusing it of stock manipulation and accounting fraud. Adani Power, one of the conglomerate’s listed companies, saw its shares dip nearly 50 per cent till the close on Wednesday.

Adani Power wanted to “expand its offerings and operations in the thermal power sector in the state of Chhattisgarh” with this acquisition. The deal was Adani’s second-biggest M&A in the energy sector, after its acquisition of SB Energy India.

DB Power that is engaged in the business of establishing, operating and maintaining thermal power generating operations, owns and operates a 2x600 MW thermal power plant at Janjgir Champa district of Chhattisgarh. Diligent Power Private Ltd is the holding company of DB Power.

The enterprise value of the deal was Rs 7,017 crore. After the completion of the deal Adani Power was to hold 100 per cent of the total issued, subscribed and paid-up equity share capital and preference share capital of DPPL.

The Adani Group, previously, withdrew its Rs 20,000 crore follow-on public offering (FPO) after it was fully subscribed. Gautam Adani said that to proceed with the FPO felt morally wrong considering the volatility of the market following Hindenburg’s report.

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