By: Sneha Chaudhary
- Adani Is Looking To Buy Essel’s Transmission Project
- Transmission Lines Laying About 941KM And Involves 4000-Crore
- Biggest Transmission Project Ever In Private Sector
Billionaire Gautam Adani is looking to buy from the debt-charged Essel Company a major power transmission project, two individuals aware of the discussions said. It will be the newest in a string of deals that have helped form the acquisitions of the conglomerate infrastructure in ports and airports.
The project involves the construction of approximately 941 km of transmission lines across Maharashtra, Telangana and Andhra Pradesh and the establishment of a Warangal substation. Warora Kurnool Transmission Ltd (WKTL), a special-purpose vehicle set up in April 2015 by Essel Infraprojects Ltd, is designing it.
This is one of the largest transmissions projects the private sector has ever been provided to develop and operate. However, considering the debt issues of Essel, they had failed to put in the equity required to complete the project and, thus, the lenders undertook a replacement process to bring in a new sponsor, Adani Transmission Ltd., to build the Project. Yes Bank, which is the key lender for this initiative, has led the procedure, said one of the two people cited above on condition of anonymity. The Company is currently pending on regulatory clearances, he said.
According to the new credit rating report by Care Ratings, the overall project expenditure of Rs 4,000 crore is to be financed by a loan of Rs 2,790 crores and equity of Rs 1,210 crores. As of 31 December 2018, the Essel group had infused into the Project just about 458.5 crore equity. The entity cited above added that about 1,200 crore debt had been disbursed for the Project so far.
This would be the first transfer of an asset in the transmitting space, said the second person quoted above.
“The substitution path has been placed on the market for the stressed donor to leave the planned substitute to help lenders.”The second person added that the struggling sponsor with one that has a strong balance sheet could conduct the Project and operate it.
The Adani group has significantly grown by acquisitions in the last couple of years. In the ports market, where Adani is now the largest private-sector port operator, the Company has recently acquired a 75 per cent interest in Krishnapatnam Port Co. Ltd. at an estimated value of nearly 12,000 crores.