RInfra to sell 49% in power arm to Canada’s Pension Board

Canada-based Public Sector Pension Investment Board has signed a non-binding term sheet with Reliance Infrastructure, an Anil Ambani Group company, for acquiring a 49 % equity stake in the company’s integrated power generation, transmission and distribution business, which serves the Mumbai region.

 The exclusivity agreement between the companies will be valid till March 31, 2016.

The specified business would be carved out of Reliance Infrastructure (RInfra) into a separate special purpose vehicle (SPV). 

In the SPV, RInfra will have a controlling 51 per cent stake and Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension fund managers, will own 49 per cent.

The Mumbai power business of RInfra, known as Reliance Energy, serves a peak demand of over 1,800 MW and had clocked revenues of ₹7,700 crore in FY15. Industry sources said that enterprise value of the Reliance Energy is about ₹15,000 crore. RInfra will sell 49 % equity to PSP Investments for ₹3,500 crore. 

RInfra debt will reduce by 70 % from ₹16,000 crore to ₹5,000 crore. 

This includes ₹8,000 crore of RInfra’s debt moving to Reliance Energy.