Adani Power Ltd’s agreement to purchase thermal power assets worth Rs 7,017 crore from DB Power has collapsed as the initial contract has lapsed.
Adani power in a regulatory filing on Wednesday have conveyed that that the long stop date under the memorandum of understanding dated August 18, 2022, has expired,
Adani Power told the stock exchanges earlier in August 2022 that it has reached an agreement to buy DB Power Ltd (DB Power), which owns and runs a functioning 2×600 MW thermal power plant in the Chhattisgarh district of Janjgir Champa.
Adani Power was contacted with questions about the deal’s progress, but no response was received.
Given the claims of fraud made against the Adani Group by the US-based short-seller Hindenburg Research, this becomes significant. This issue shook Parliament earlier this month as well, and the opposition called for an investigation into the matter to be overseen by the Supreme Court and a Joint Parliamentary Committee.
The MOU’s (memorandum of agreement) initial period ended on October 31, 2022. Later, the transaction’s deadline was given four extensions, ending on November 30, 2022, December 31, 2022, and February 15, 2023.
A thermal power-producing plant in Chhattisgarh is what DB Power is in the business of building, running, and maintaining.
With fuel supply agreements with Coal India Ltd. and long- and medium-term power purchase agreements covering 923.5 MW of its capacity, DB Power has been successfully running its facilities.