Reliance Power And Jaypee Power Deal Called Off

Reliance Power on Wednesday (24th September 2014) announced in the stock exchange disclosure that it had dropped off the deal with Jaiprakash Power Ventures. Going down the history, both the companies had joined hands for the acquisition of the entire hydroelectric power portfolio of JVPL with the aim to be the largest private power companies with a 7800 MW operating capacity by the end of 2014-2015. The deal was valued around Rs 12000 crore. 

The company in the disclosure mentioned, "Due to prevailing regulatory uncertainties, and tariff issues, which impact valuations, Reliance Power and Jaiprakash Power Ventures have terminated discussions regarding Reliance Power's acquisition of Jaiprakash Power Ventures's Hydro portfolio of 3 projects, with an aggregate capacity of 1791MWs."

Reliance Power which has a debt over Rs 25000 crore is in middle of getting various operational projects. This move is seen as a stumbling block for the Jaypee Group which was looking forward to reduce its debt by Rs 60000 through this deal.

In the disclosure Manoj Gaur, Chairman of Jaypee Group mentioned that, "differences of the commercial aspects have caused the problems. He also added that for reasons not attributable to any regulatory uncertainties, discussion with ADAG has been called off."

After the announcement, the shares of Jaiprakash Power Ventures tumbled down by 11% at Rs 12 and the shares of Reliance Power came down by 6% at Rs 71.