Guwahati: The deal between DB Power and Adani’s Company which was supposed to cost Rs 7,017 crore fell through on Wednesday. The corporation has made this choice because there is no longer time to execute the transaction.
A damning analysis released on January 24 by the US-based Hindenburg Research prompted Gautam Adani’s business to reconsider its capital investment plans, which is when the latest development occurred.
Adani Power agreed to buy DB Power on August 18, 2022 with a goal of closing the transaction by October 31, 2022.
The due date was constantly pushed back.
The enterprise value of DB Power which has a 1,200 megawatt coal-fired power plant in Janjgir Champa, Chhattisgarh, including debt was estimated to be Rs 7,017 crore.
India’s competition regulator had approved the company’s planned bid in order to obtain the DB power on September 29 of last year.
Nevertheless, the deadline for concluding the deal was raised four timeswith the last extension bringing the closing date forward to February 15, 2023.
The closing date (also known as the “long stop date” in merger and acquisition terminology) to complete the purchase of DB Power “expired” on Wednesday, Adani Power told stock markets.
The transaction’s failure is a setback for the Adani Group which has been rapidly increasing its dominance throughout the nation.
After purchasing SB Energy India in 2021 for over Rs 26,000 crore, the DB acquisition was Adani’s second-largest M&A in the electrical sector when it was announced in 2022.
The most recent development demonstrates how the “apples to airport” corporation is putting its financial health before rapid expansion.
In an effort to reassure investors alarmed by Hindenburg’s report on its business practises, it is bolstering its balance sheet by paying off debt, reclaiming shares that have been pledged and preserving cash.
Adani Power which has 13.6 GW of capacity spread across seven thermal assets in five states and a 40 MW solar asset owed Rs 36,031 crore as of September 30, 2022.