Adani group eyeing big-bang acquisition in power transmission segment

After sealing high-profile deals with the Avantha Group and Lanco Infratech in the power segment, Billionaire Gautam Adani led Adani Group continues to be on the prowl for strategic assets in the sector and ET NOW learns from multiple sources familiar with ongoing negotiations that the conglomerate is eyeing a big-bang acquisition in the power transmission segment to leverage the benefits of scale driving.
" They are in advanced discussions to buy out South East UP Power Transmission Company Ltd, which is a holding company of Spanish infrastructure group Isolux Corsan Concesiones. It is one of the largest single asset power transmission targets in the country and the enterprise value of the proposed transaction could be between $800 mn to $1bn. The transaction is in the final stages and certain government approvals are pending , " said one of the sources cited above. ET NOW was the first to report the story.

South East U.P. Power Transmission Company Limited (SEUPPTCL) was incorporated as a special purpose vehicle to build, own, operate, maintain and transfer (BOOT) the specified intra-state transmission system for a period of 35 years under public private partnership model. According to the company website, a consortium of Isolux Corsan Concesiones, S.A, was selected as the successful transmission service provider (TSP) through competitive bidding process. The project operates in southern, central and eastern UP primarily through the 765kV and 400kV network.

" Isolux Corsan has been looking for a seller and Adani Group is looking to expand so its a natural deal. The plan is to have enough assets and possibly explore the InVit ( infrastructure investment trust) route at a later stage. Transmission and solar are the next growth stories for the conglomerate," according to an industry executive familar with the group's plans.

Isolux Corsan Concesiones operates in energy and road Construction, telecommunication systems, railways installations, industrial systems and power transmission projects.

" Transmission assets have a long lifespan of nearly 50 years as compared to other infra assets like road and power generation. The Adani Group recently purchased transmission assets from Reliance Infra and they are looking to aggregrate such projects," added another source.

As of December 2016, Adani Transmission had six fully operational transmission systems and the company is also constructing additional projects of around 1900 circuit km in Rajasthan, Chhattisgarh, Madhya Pradesh, Maharashtra, Jharkhand and Bihar.

ET NOW could not elicit an immediate email response from the Adani Group on the story and is awaiting responses from South East UP Power Transmission Company Ltd and Isolux Corsan.