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Adani Power’s Rs 7,000 crore deal to buy DB Power assets fails




Adani Power's Rs 7,000 crore deal to buy DB Power assets fails

The announcement of the expiration of the long-stop date means that the acquisition is closed for now.

New Delhi:

Gautam Adani-led Adani Power’s plan to acquire DB Power Ltd’s coal-based power generation units for Rs 7,017 crore has fallen through as the deadline to complete the transaction has passed without signing the agreement.

“We would like to inform that the long term period under the MoU dated August 18, 2022 has come to an end,” Adani Power said in an exchange filing on Wednesday.

The announcement of the expiration of the long-stop date essentially signifies that the acquisition is closed for now.

After signing the initial deal in August last year, the date for completion of the acquisition of DB Power was extended four times.

It comes at a time when the port-to-energy group is grappling with the fallout from a damning report of alleged accounting fraud and stock manipulation by a US short-seller, allegations the group vehemently denies.

The report, which flagged high debt, including pledging shares of inflated stock for loans, put the entire group in a precarious financial position.

Since the January 24 report, group companies have wiped off half of their market value and the group has had to pledge more shares to meet debt norms. It also kicked off a follow-on share sale in its flagship firm, Adani Enterprises Ltd, which barely scraped by on the last day of the sale.

The acquisition of DB Power, which currently operates a 2×600 MW coal-fired power plant in Chhattisgarh’s Janjgir Champa district, was expected to expand Adani Power’s offering and operations in the thermal power sector in the state.

In the stock exchange filing, the company did not specify the reason why the deal could not be completed or whether the deal would be renegotiated in future.

The initial period of the Memorandum of Understanding (MoU) was till October 31, 2022, which was extended by mutual agreement. The long-stop date was first extended to November 30, 2022, and then to December 31, 2022 and January 15, 2023, and finally to February 15, 2023.

DB Power has long and medium term power purchase agreements for 923.5 MW of its capacity, supported by fuel supply agreements with Coal India Limited. It had registered a turnover of Rs 3,488 crore for the financial year 2022.

DPPL (Diligent Power Private Limited) is the holding company of DB Power.

(This story has not been edited by NDTV staff and was auto-generated from a syndicated feed.)

(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)

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