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Hydro projects deal between Rel Power, Jaypee called off

The two firms, who had been in talks for two months, announced the decision to call of the talks in separate press statements but did not give detailed reasons for it.

Reliance Power ‘s talks to acquire Jaiprakash Power Ventures ‘ three hydro power projects have been called off following lack of clarity over capacity of the Karcham Wangtoo project.

The two firms, who had been in talks for two months, announced the decision to call of the talks in separate press statements but did not give detailed reasons for it. Industry sources, however, said talks collapsed after Central Electricity Authority (CEA) issued show cause notice for alleged violation of techno-economic clearance conditions of the Karcham Wangtoo project, which had an approved capacity of 1,000 MW but actual capacity was built to 1,200 MW.

Jaiprakash group (Japyee) was looking at selling the hydro projects to cut its nearly Rs 12,000 crore debt. Jaiprakash Power Ventures Ltd (JPVL) said in a statement, “For reasons not attributable to any regulatory uncertainties but due to difference of commercial aspects, discussion with ADAG has been called off.”

“The company was determined to take steps in the larger interest of the shareholders in the prevailing economic sentiment in the country,” Jaypee Group Chairman Manoj Gaur said in the statement. JPVL has a generation base of 1,700 MW hydro power (1,000 MW Karcham Wangtoo, 300 MW Baspa II, and 400 MW Vishnu Prayag) and 1,160 MW thermal power, including 500 MW Bina thermal project and 660 MW Nigrie thermal power project.

A Reliance Power spokesperson said, “Due to prevailing regulatory uncertainties and tariff issues, which impact valuations, Reliance Power and JPVL have terminated discussions regarding Reliance Power’s acquisition of JPVL’s 3 projects with an aggregate capacity of 1,791 MW.” In July, Reliance Power signed an initial agreement to acquire all the three hydroelectric power plants of JPVL.

Currently, Reliance Power has hydroelectric power projects aggregating over 5,000 MW under development, of which 4,200 MW are located in Arunachal Pradesh, 700 MW in Himachal Pradesh and 400 MW in Uttarakhand.

Jaiprakash Pow stock price

On September 24, 2014, Jaiprakash Power Ventures closed at Rs 13.65, down Rs 0.85, or 5.86 percent. The 52-week high of the share was Rs 26.63 and the 52-week low was Rs 12.05.


The latest book value of the company is Rs 21.54 per share. At current value, the price-to-book value of the company was 0.63.

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