Mumbai, Feb 12 (IANS): Fair trade regulator Competition Commission of India (CCI) has approved the sale of Reliance Infrastructure's (RInfra) Mumbai power business to Adani Transmission Ltd, RInfra announced on Monday.
In a release here, RInfra said it had signed the binding agreement for the sale of its integrated Mumbai power business in December 2017. The transaction was expected to be completed by March.
The CCI "has approved sale of RInfra's Mumbai power business to Adani Transmission Ltd (ATL)," the statement said.
Announcing the largest-ever debt reduction exercise by an Indian corporate, RInfra said in December that it has signed a definitive agreement for 100 per cent sale of its Mumbai power business to ATL for a total consideration of Rs 18,800 crore.
While the total deal value of the sale of the Mumbai power utility, Reliance Energy, is Rs 13,251 crore, regulatory assets estimated at Rs 5,000 crore and net working capital on closing estimated at Rs 550 crore would also accrue to RInfra as part of the agreement.
Total deal value is at Rs 13,251 crore, which comprises of business valued at Rs 12,101 crore and regulatory assets approved so far of Rs 1,150 crore.
In addition, regulatory assets under approval estimated at Rs 5,000 crore and net working capital on closing estimated at Rs 550 crore will flow directly to RInfra, it said.
"RInfra will utilise the proceeds of this transformative transaction entirely to reduce its debt, becoming debt-free and up to Rs 3,000 crore cash surplus," a statement said.
Describing the deal as the largest ever debt reducing exercise by any corporate, RInfra said that monetisation of the Mumbai power business is a major step in the company's deleveraging strategy for future growth.
"Reliance Infra's Mumbai power business is India's largest private sector integrated power utility distributing power to nearly three million residential, industrial and commercial consumers..., covering an area of 400 sq km," the statement added.
The Mumbai utility caters to a peak demand of over 1,800 MW, with annual revenues of Rs 7,500 crore.