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Jindal Power Ltd, a subsidiary of Jindal Steel and Power Ltd (JSPL), is looking to sell its entire stake in the 1,800-MW Kamala hydro electric power project in Arunachal Pradesh.
The company has not officially commented on the exact percentage of equity stake it plans to sell, but resolutions passed by its board - a copy which has been reviewed by BusinessLine - state that the board of directors has approved the sale of its "entire equity share" in the Kamala project.
JSPL has equity interests in three hydroelectric projects, including the Kamala project in Arunachal Pradesh through Jindal Power. The other two are the 3,097-MW Etalin project and the 680-MW Attunli project.
These three ventures, with a combined projected capacity of 6,100 MW, were to be developed by Jindal Power through three separate 74:26 joint ventures with Hydro Power Development Corporation of Arunachal Pradesh Ltd (HPDCAPL).
Earlier, the Arunachal Pradesh Government had decided to scrap a deal that gave JSPL a 49 per cent stake in HPDCAPL. "With respect to the 1,800-MW Kamala project, we have submitted expression of interest to Satluj Jal Vidyut Nigam Ltd (SJVNL)," a JSPL spokesperson told BusinessLine .
SJVNL had sought expressions of interest in April from hydro power developers in Arunachal Pradesh for a partnership or a complete stake sale.
Since it has not heard from SJVNL yet, it has started speaking to other developers to "unlock shareholder value", the spokesperson added. People close to the development indicated that the valuation of Jindal Power's stake in the Kamala project won't be too high as the plant has not been developed yet.
According to the latest annual balance sheet, the company has total borrowings of Rs. 1,307.88 crore as on March 31, 2013.
JSPL had won the Kamala hydro power project in 2009. However, the detailed project report was cleared by the Central Electricity Authority only in December 2013.
Project implementation was further delayed as HPDCAPL could not come up with its share of funding. In all, JSPL had earmarked Rs. 50,000 crore for the three hydro projects in the State.
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