JSW Energy in talks to buy Monnet Power’s Odisha plant

12 December 2016

JSW Energy, part of Sajjan Jindal’s JSW Group, is believed to have initiated talks for a possible acquisition of Monnet Power’s 1,050 Mw (2×525) coal-fired plant in Odisha at Angul, close to the site of another Group company, Jindal Steel & Power Ltd’s (JSPL) steel making facility.

“JSW Energy is looking at some unfinished power projects in Odisha. The company is eyeing Monnet Power’s asset for which talks have taken off”, said a source, adding the talks were preliminary.

Monnet Power’s coal-based plant was in an advanced stage of commissioning. Monnet Power’s parent company, The Monnet Ispat & Energy had won the Mandakini coal block in Odisha in competitive bidding, it surrendered the block later on grounds of economic unviability. JSW Energy is increasingly betting on the inorganic route to augment its power capacity. In the past one year alone, the company is understood to have evaluated at least 30 proposals in its race for power assets acquisition. Both JSW Energy and Monnet Power refused to comment on the prospective deal. An e-mail questionnaire sent to both remained unanswered.

At a recent earnings conference call, Pramod Menon, director (finance) at JSW Energy, said the September quarter was not so encouraging for the company. “Compared on a year-on-year basis at plant levels, generation was lower by about 17 per cent in Ratnagiri. At Vijayanagar, we have seen a sharp dip of about 63 per cent and in Barmer, a dip of about eight per cent.

The generation has been impacted at Barmer primarily on account of backdown of the units, but at Vijayanagar, where we have  seen a very sharp reduction, it is primarily on account of our inability to get the schedule for the entire power plant. Wherever we have participated in bids, those processes are still continuing and have not got translated into firm offers”, Menon said during the conference call.

In September 2015, JSW Energy bought two hydro power projects — Baspa II and Karcham Wangtoo — from Jaiprakash Power Ventures Ltd for Rs 9,275 crore, lower than the originally agreed value of Rs 9,700 crore.

It also acquired the Bina thermal plant from Jaiprakash Power at an enterprise value of Rs 2,700 crore though it took Rs 3500 crore to build the power plant.

In May 2016, JSW Energy agreed to buy out a 1000 Mw power plant owned by JSPL in Chhattisgarh for Rs 4000 crore.

With a combined power capacity of around 4500 Mw, JSW Energy is today among the top four power producers in the country in the power sector alongside the likes of Adani Power, Vedanta and Tata Power.

Source – BS