INDIA BUSINESS WORLD - MAY 11th - MAY 31st - 2008
JAYPEE GROUP BUYS BINA POWER
JAYPEE group company Jaiprakash Power Venture (JPVL) has acquired Bina Power Supply Company (BPSCL) from the Aditya Birla group for Rs 150-175 crore. Aditya Birla group had formed BPSCL in early the 90s to develop 1,000 mw power plant in two phases of 500 mw each at Bina in Madhya Pradesh, but didn’t pursue it after initial progress.
BPSCL had received government approvals for the power project, which were later cancelled. “JPVL has now approached the Madhya Pradesh government for revival of the various approvals required for setting up of the plant,” JPVL managing director Suren Jain said, adding that the first phase of the project would commence operation within 48 months of receipt of all approvals. JPVL plans to commission 500 mw in the first phase at an investment of Rs 2,500 crore and subsequently raise the capacity to 1,000 mw. The company didn’t provide details on how it plans to raise the funds for the project. Indian regulation allows a debt equity ratio of 70:30 for power projects.
The Bina project is spread over 1,600 acres and had earlier obtained coal linkage for 500 mw, which was cancelled after the project failed to take off. “We can apply again and get the linkage reinstated,” says Mr. Jain.
JPVL, which filed draft red herring prospectus in January with market regulator Sebi, plans to raise over Rs 3,000 crore through its initial share sale this year. India’ two largest banks SBI and ICICI Bank have together picked up 3% stake in JPVL for Rs 400 crore in a pre-IPO placement. JPVL re ported a net profit of Rs 191 crore and net sales of Rs 405 crore for the year 2007-08.
Post the Bina acquisition, JPVL, which is profit-making company and operates the 400 mw Vishnuprayag hydro electric proj ect, will have interests in almost 7,000 mw power assets, the company said. These proj ects, which are at different stages of imple mentation include 1,000 mw Karcham Wangtoo Hydro Electric Project, 1,320 mw super critical technology coal-based power plant at Nigrie in MP, two projects totalling 2,500 mw in Arunachal Pradesh and two projects totalling 720 mw in Meghalaya.
Jaypee group, which is India’s largest private hydropower producer with an operational ca pacity of 700 mw, is now expanding its footprint in thermal energy also. With the acquisition Bina Power, Jaypee group will have a total ther mal power capacity of 2,600 mw, including combined captive capacity of 300 mw.
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