India Grid Trust (IndiGrid), a power infrastructure investment trust (InvIT), has announced that it has signed an agreement to acquire NER-II Transmission Ltd (NER-II) from Sterlite Power for ₹4,625 crore. The sale of the transmission asset from Sterlite Grid, a wholly-owned subsidiary of Sterlite Power will be completed upon the receipt of unit-holders’ consent, regulatory and other relevant approvals which is being anticipated to be by Q4 of the current fiscal. The acquisition will be funded through a combination of internal accruals, debt, equity proceeds from the preference issue completed in May 2019 and its forthcoming rights issue.
Post completion, the platform’s asset portfolio will consist of 13 power transmission projects, with a total network of 38 power transmission lines and 11 substations extending over 7,570-circuit km and 3,350 MVA in 17 States and 1 Union Territory.
NER-II is part of the Inter-State Transmission Scheme network and was awarded on a Build, Own, Operate, Maintain basis with a contractual period of 35 years. It has been planted to strengthen the power transmission network in the North Eastern States and address the transmission, sub-transmission, and distribution system needs of the region.
Harsh Shah, Chief Executive Officer of IndiGrid, said “NER-II fits well with our strategy of focusing on operating assets with long-term cash flows and minimal counter party risk. This acquisition would be distribution per unit (DPU) accretive and augment our recent increase of DPU to INR 12.40 per annum for a considerable period. With a robust acquisition pipeline and support from our sponsors, IndiGrid is well positioned to execute its plans for providing stable and growing DPU, while maintaining a robust balance sheet,”.