Anil Ambani
Reliance Communications Chairman Anil Ambani. REUTERS/Shailesh Andrade

The Maharashtra Electricity Regulatory Commission (MERC) has approved the sale of Reliance Infrastructure (RInfra) Limited's integrated Mumbai power business to Adani Transmission Limited (ATL). The 100 percent stake sale of the Anil Ambani-owned company is expected to be closed in July at a valuation of Rs. 18,800 crore.

The development comes after MERC concluded its hearing in the matter and reserved its order to June 14. RInfra Ltd has already received the approval of the Competition Commission of India (CCI) and its shareholders for the deal.

In December 2017, RInfra Ltd. and ATL had signed a Definitive Binding Agreement for 100 per cent stake sale of the integrated business of generation, transmission and distribution of power for Mumbai.

RInfra Ltd. will utilise the proceeds of this transformative transaction entirely to reduce its debt, becoming debt free, with up to Rs 3,000 crore cash surplus, in what is the largest ever debt-reducing exercise by any Indian corporate.

This monetisation is a major step in RInfra Ltd.'s deleveraging strategy for future growth, said the official. The RInfra Ltd',s Mumbai power business (known as Reliance Energy) is India's largest private sector integrated power utility distributing power to nearly 3 million residential, industrial and commercial consumers in the suburbs of Mumbai, covering an area of 400 sq km.

It caters to a peak demand of over 1,800 MW, with annual revenues of Rs 7,500 crore with stable cash flows. RInfra Ltd. will also focus on upcoming opportunities in asset light EPC and defence businesses.

RInfra Ltd. is one of the largest infrastructure companies, developing projects through various Special Purpose Vehicles (SPVs) in several high growth sectors such as Power, Roads and Metro Rail in the Infrastructure space and the Defence sector.

[With inputs from IANS]