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M&A Buy Side Advisory

Adani Transmission Ltd

Sole M&A advisor and Sole Mandated Arranger

2018

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

Adani Transmission Limited (ATL) has acquired Reliance Infrastructure Limited’s (R-Infra) integrated Mumbai power business which included R-Infra’s assets in power generation, transmission and distribution in Mumbai (Mumbai-GTD business). The acquired asset from R-Infra is housed in Adani Electricity Mumbai Limited (erstwhile Reliance Electric Generation & Supply Limited), a newly formed entity and a subsidiary of ATL.

The integrated Mumbai GTD Business includes retail power distribution network in Mumbai suburbs spread across 400 sq. Km catering to ~3.03 million customers, entailing ~1,900 MW of power distribution along with 500 MW coal based generation plant at Dahanu and over 540 circuit Km of transmission network along with 8 substations spread across Mumbai and Maharashtra.
This was one of the largest M&A transaction in Power distribution sector for which Asset Triple A Asia awarded the transaction as ‘Utility Deal of the Year’.

 

Key Learning

The signing of Definitive Agreement and execution of Share Purchase Agreement between ATL and R-Infra for transaction of this size was achieved post several rounds of discussions and negotiations between the parties including various advisors/ consultants.

As the transaction also involved debt tie-up for integrated distribution, transmission as well as generation business, the transaction structure & business chain including the capital structure was very exhaustive and required substantial effort for preparing the financial model and information.memorandum.
The closure of entire transaction was achieved in a single day with completion of several activities viz. transfer of equity funds by promoters, disbursement by lenders, transfer of shares by seller, release of funds for MERC payment and repayment of existing lenders of R-Infra, pledge of shares etc.  This challenging task was successfully achieved due to a comprehensive disbursement escrow agreement which included various roles and responsibilities of each party involved along with various step-wise procedures to be followed for each escrow account by each escrow agent/ parties.

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