India Grid Trust (IndiGrid), on March 5, 2021, signed a share purchase agreement to acquire NER-II Transmission Ltd (NER-II), from Sterlite Power as part of the Framework Agreement.
The indicative value of the acquisition is Rs.4,625 crore and the acquisition would boost IndiGrid’s AUM (assets under management) by 34 per cent to over Rs.20,000 crore ($2.8 billion).
IndiGrid’s portfolio
Post completion, IndiGrid’s asset portfolio would consist of 13 power transmission projects, with a total network of 38 power transmission lines and 11 substations extending over 7,570 ckm and a transformation capacity 13,350 MVA, spread over 17 Indian states and 1 Union Territory.
On March 2, 2021, T&D India had reported that the IndiGrid board approved the acquisition of NER-II. (Read full story).
NER-II
NER-II is part of Inter State Transmission Scheme (ISTS) network, and was awarded on a Build, Own, Operate, Maintain (BOOM) basis with a contractual period of 35 years. The project has 11 elements including two substations of 1,260 MVA capacity and four transmission lines extending over 830 ckm. The asset spans across Assam, Arunachal Pradesh and Tripura and is of strategic importance for the delivery of power in one of the toughest regions in the country. This project will strengthen the power transmission network in the North Eastern States and address the of transmission, sub-transmission, and distribution system needs of the region.
Framework agreement
IndiGrid had signed a framework agreement in April 2019 with Sterlite Power for acquisition of NER-II upon commissioning. This transaction is expected to be consummated during Q4 FY21, subject to unitholders’ approval, regulatory approvals, and other customary closing adjustments. The acquisition will be funded through a combination of internal accruals, debt, equity proceeds from the preference issue done in May 2019 and forthcoming rights issue. Post this acquisition, the net debt/AUM would stand at around 64 per cent.
(Featured photograph shows a project element of NER-II)
