Noida, July 24 (IANS): Infrastructure developer Jaypee Group Thursday said the withdrawal by Taqa India Power Ventures from an agreement to buy hydro-electric projects will not affect the group's resolve to reduce debt and unlock stakeholders value.
Taqa India Power Ventures had entered in an agreement to buy Jaiprakash Power Ventures' Baspa II and Karcham Wangtoo hydro-electric projects in Himachal Pradesh.
"It is unfortunate that the Abu Dhabi based company Taqa has decided to undo its agreement with Jaiprakash Power Ventures to buy 1,000 megawatt (MW) Karcham Wangtoo and 300 MW Baspa II projects due to a change in their business strategy and priorities," said Manoj Gaur, executive chairman, Jaypee Group.
"This will, however, not impact our Group’s commitment to reduce debt to Rs.45,000 by March 2015. We have created valuable assets and we are confident to get investors to help us raise funds in the near future.”
On March 1, 2014, the JPVL had signed an agreement with Taqa to sell the two hydro power projects for an enterprise value of Rs.9,689 crore.
However, the company said that it was informed by Taqa about its decision to review their investment strategy and that they were opting out of the transaction.
"We recognise that TAQA has exercised the buyer’s prerogative to opt out of the deal, but as per the agreement, they will have to pay to JPVL the break away fee," the company said in a statement.
TAQA has been present in India for the past couple of years with one thermal power plant operating in South India and another hydro-electric plant about to be commissioned in Sorang in Himachal Pradesh.
The company added that industry experts have called the company's hydro-electric plants as best in the country, and have been making profit right throughout their existence.
"We had undertaken divestment of these as part of our objective to reduce debt. Our focus and resolve to work towards that goal remains as steadfast as ever," the company added.