NTPC Acquires North Eastern Electric Power Corporation Limited

The National Thermal Power Corporation of India (NTPC) has acquired 3,60,98,09,800 equity shares in the North Eastern Electric Power Corporation Limited (The share purchase agreement represents an amount of ₹40 billion (~$530.23 million), 100% of the total paid-up share capital of NEEPCO.

As per the company’s filing with the Bombay Stock Exchange (BSE), the balance sheet size of NEEPCO stood at ₹150.7 billion (~$1.99 billion) as on March 31, 2019, and the authorized share capital of NEEPCO is ₹50 billion (~$662.78 million). The total issued, subscribed, and paid-up share capital of NEEPCO stands at ₹36.09 billion (~$478.4 million).

The total loan book of NEEPCO is ₹70.52 billion (~$934.79 million), with a turnover of ₹21.084 billion (~$279.48 million) and the company registered a profit after tax of ₹2.139 billion (~$28.35 million) during the financial year 2018-19.

According to the document, the Government of India is the joint promoter of both the NTPC (51%) and NEEPCO (100%) and is the seller of the shares held by it in NEEPCO to the NTPC. The proposed transaction is a related party transaction between the government of India and a government company.

The document states that the proposed transaction between the NTPC and the government of India is exempt from the requirement of taking approval from the shareholders.

Earlier, the Cabinet Committee on Economic Affairs (CCEA) in a meeting held on November 21, 2019, had in-principle granted its approval to the strategic disinvestment of government’s shareholding in NEEPCO to NTPC along with the transfer of the management control.

The document said the takeover of NEEPCO would not only give a foothold to NTPC in the northeaster regions but also help unlock potential synergies with many of its existing projects.

NEEPCO has an operational portfolio of 1,457 MW, comprising a hydropower generation capacity of 925 MW, the gas-based generation capacity of 527 MW, and a solar generation capacity of 5 MW. The acquisition will also help NTPC gain expertise in developing hydropower projects in difficult terrains such as the northeastern region of the country. Right now, NTPC’s presence in the eastern region of India is through its coal power projects.

Recently, NTPC invited bids for the balance of system package for the 735 (3×245) MW Nokh solar project in the state of Rajasthan. The last date for the submission of techno-commercial bids is April 27, 2020, while the bid opening date has been scheduled for April 28, 2020.

Earlier, the Ministry of New and Renewable Energy (MNRE) designated NTPC as the renewable energy implementing agency to facilitate the application of connectivity and long-term access (LTA) in the interstate transmission system network.

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