M&A Buy Side

Adani Power Limited

Buy Side Advisor


Details of the Transaction (Including unique traits, if any)

GMR Chhattisgarh Energy Limited (GCEL) is operating 1,370 MW (685 x 2 MW) supercritical thermal power plant at Raikheda in Raipur district of Chhattisgarh. Adani Power acquired 100% shareholding of GCEL – 47.62% from the promoter GGAL and balance from a consortium of lenders following approval of plan for acquisition of GCEL submitted by Adani Power Ltd. Definitive Agreements for the same were signed between the sellers and Adani Power on June 29, 2019. The acquisition was completed on August 2, 2019.


Uniqueness of the Deal:

  • The Transaction is the first to be completed under Prudential Framework for Resolution of Stressed Assets issued by Reserve Bank of India (RBI) on June 07, 2019 and was then among the first two successful asset resolutions in the sector
  • The largest power asset acquisition completed successfully outside Insolvency & Bankruptcy Code
    While the industry average valuations are around INR 3 Crore / MW, the said acquisition cost translated to highly attractive cost of ~ INR 2.58 Crore / MW
  • The addition of 1,370 MW solidified APL’s position as India’s largest private sector thermal power producer, with aggregate operating capacities of 12,450 MW
  • The acquisition of the Company gave APL a strong presence in India’s leading power generating as well as power consuming regions
  • Debt required for meeting capital expenditure requirements to comply with FGD norms has been considered as permitted indebtedness and ceding of pari-passu security on the assets up to an extent of 75% on the total capex requirement. Further, any enhancement in working capital limits post transaction closure date and as may be approved from time to time is also considered as permitted indebtness, thus facilitating the buyer to raise such debt without seeking for further approvals
  • While a reasonable amount of debt was paid upfront to the Lenders, the continuing debt was restructured to be paid in structured installments post moratorium of 7 years. The extended moratorium period was designed to provide the acquirer with sufficient time to tie up the commercial arrangements viz., Power Purchase Agreement, Fuel Supply Agreement and also stabilize the operations of the plant that was otherwise operating at very low efficiency under the existing management.



Key Learnings

  1. Structuring the transaction for optimizing the value to the Buyer
  2. Nuances of the June 07th circular
  3. Various steps involved in the resolution process

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