Qatar Investment Authority (QIA) has agreed to buy a 25.1% stake in billionaire Gautam Adani’s Mumbai power distribution business for Rs 3,200 crore (about $450 million).
The deal also involves QIA taking on shareholder subordinated debt in Adani Electricity Mumbai Ltd, a unit of Adani Transmission Ltd, the companies said in a statement.
The transaction is expected to complete by early 2020, subject to regulatory approvals, the statement said.
Adani Transmission had bought the Mumbai power business from Anil Ambani-led Reliance Infrastructure Ltd two years ago. That transaction valued the business at Rs 12,101 crore. The latest deal values the business around Rs 12,800 crore.
As part of the transaction, ATL and QIA have agreed to ensure that over 30% of the electricity supplied by AEML is sourced from solar and wind power plants by 2023. They also agreed upon other green initiatives to combat climate change and facilitate the transition to a sustainable and low carbon economy.
SKN Advisors Ltd acted as financial advisor and Cyril Amarchand Mangaldas acted as legal advisor to ATL and AEML on the transaction.
J.P. Morgan acted as financial advisor and Cleary Gottlieb Steen & Hamilton LLP and AZB & Partners acted as legal advisors to QIA on the transaction.
AEML is the licensee for an integrated power distribution, transmission and generation business that currently has more than thirty lakh consumers in Mumbai. The firm’s market share of Mumbai is approximately 87% by license area, 67% by consumers served and 55% by electricity supplied.
Gautam Adani, chairman at Adani Group, said the transaction is a significant step towards the group’s long term partnership with QIA. “This investment demonstrates our confidence in India, with whom Qatar shares deep-rooted ties and excellent relations,” said Mansoor Al-Mahmoud, CEO at QIA.
Qatar Investment Authority, founded in 2005, is the sovereign wealth fund of the State of Qatar.