Qatar to Invest $450 Million in Adani’s Mumbai Power Unit

(Bloomberg) –Qatar Investment Authority is investing about $450 million for a 25.1% stake in a unit of Adani Transmission Ltd., the Indian company said in a filing Wednesday.
The deal includes a subordinated debt investment by QIA, according to the filing, which said the two sides have signed a definitive agreement. The transaction is expected to be completed in early 2020 after obtaining regulatory approvals, it said.

The unit, Adani Electricity Mumbai Ltd., offers power distribution, transmission and generation for more than 3 million customers across Mumbai and handles about 55% of the city’s electricity supply. Under the deal, more than 30% of the subsidiary’s supplied electricity will be sourced from solar and wind power generation by 2023, according to the filing.

“With this deal, Adani Transmission has shown the will to systematically deleverage its balance sheet,” said Deven Choksey, managing director at Mumbai-based K.R. Choksey Shares & Securities Pvt. “This will give them room to acquire more such assets in future.”

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Adani Transmission dropped as much as 4.8% after the announcement, before reversing losses to trade 1.6% higher as of 3:31 p.m. in Mumbai. It had debt of 179 billion rupees as of Sept. 30, according to data compiled by Bloomberg.

The QIA, which has about $320 billion in assets, has been diversifying into the U.S. and Asia, and deploying more resources at home, while moving away from traditional trophy assets. The wealth fund owns stakes in companies ranging from commodities giant Glencore Plc to Barclays Plc and Volkswagen AG, as well as holdings as varied as New York office space, London residential property, luxury Italian fashion and even a soccer team.

SKN Advisors Ltd. acted as financial adviser to Adani on the deal, while Cyril Amarchand Mangaldas was its legal adviser, according to the filing. JPMorgan Chase & Co., Cleary Gottlieb Steen & Hamilton LLP and AZB & Partners advised QIA.

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The Economic Times reported in September that QIA was in talks to buy up to a quarter of the company for as much as 40 billion rupees and that sale proceeds would be used to aid the utility’s capital expenditures and debt repayment plans. The filing on Wednesday said the deal was valued at about 32 billion rupees. Adani signed a binding agreement in 2017 to buy the Mumbai power business from Reliance Infrastructure Ltd. for 132.5 billion rupees.

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