BHUBANESWAR: Adani Power will have the management control of Odisha Power Generation Corporation (OPGC) if the State Government declines to enter into a transaction with the US-based AES Corporation to buy out its stake in the company. AES is reported to have informed the OPGC Board of Directors about the June 23 agreement with Adani Power Limited (APL), a part of the diversified Adani Group and a leading independent power producer in the country, to sell its stake in OPGC.
Though members of the OPGC Board are tight-lipped on issues discussed in the June 25 meeting, sources said AES transaction with Adani Power was the main agenda for discussion. Sources added that AES apprised the OPGC Board about the Share Sale and Purchase Agreement (SSPA) it has entered with APL for sale of 89,30,237 equity shares held in OPGC representing 49 per cent of the total issued, paid-up and subscribed equity share capital in the State-owned company. Adani Power has offered to buy the AES equity in OPGC for $135 million which will be around `1,020 crore.
In a regulatory filing before SEBI, APL said the transaction is subject to customary regulatory approvals including compliance with applicable requirements in relation to the Government of Odisha and the receipt of regulatory approvals from Competition Commission of India and Reserve Bank of India. The partners in a joint venture generally possess the right of first refusal on buying out the stakes held by other partner if the latter wishes to leave the business venture, industry sources said.
“On being informed about the deal with APL, the State Government which is the major shareholder in OPGC, has the first right of refusal. The Government is required to inform AES on the transaction within 30 days failing which it will be construed that the SSPA is valid,” the sources maintained. As per the OPGC disinvestment offer, the minority stakeholder in OPGC will have the management control. AES acquired stake in OPGC from the State Government through an international competitive bidding (ICB) process in 1998. “To have the management control of OPGC was the only attraction in the disinvestment offer. APL will enjoy the same benefit after successful transfer of AES equity,” sources in OPGC said.