New Delhi: Reliance Infrastructure today said the Maharashtra Electricity Regulatory Commission (MERC) has approved the 100 per cent stake sale in its integrated Mumbai power business to Adani Transmission Ltd (ATL) for an estimated value of Rs 18,800 crore.
“Following the commission’s nod, the transaction is expected to be closed in July 2018. The MERC had concluded its hearing into the matter and reserved its order on June 14, 2018,” it said in a BSE filing.
Reliance Infrastructure said it has already received approval of the Competition Commission of India (CCI) as well as its shareholders for the deal.
Reliance Infrastructure and ATL had signed a Definitive Binding Agreement for 100 per cent stake sale of the integrated business of generation, transmission and distribution of power in Mumbai in December 2017.
The company said the total consideration value of the deal is estimated at Rs 18,800 crore.
Reliance Infrastructure will utilise the proceeds of this transaction entirely to reduce its debt, becoming debt free and will have a cash surplus of up to Rs 3,000 crore.
It said this is the largest ever debt reducing exercise by any corporate and is a major step in the company’s deleveraging strategy for future growth.
The Mumbai power business (known as Reliance Energy) is India’s largest private sector integrated power utility, distributing power to nearly 3 million residential, industrial and commercial consumers in the suburbs of Mumbai, covering an area of 400 sq km.
It caters to a peak demand of over 1,800 MW, with annual revenues of Rs 7,500 crore with stable cash flows.
Going forward, Reliance Infrastructure will focus on upcoming opportunities in asset-light EPC and defence businesses, it added.