Adani Enterprises to Demerge Renewable Energy Business to Simplify Structure

The renewable power undertaking includes businesses of development of renewable power projects, generation of renewable power and trading and supply of solar and wind energy equipment.

Adani Enterprises has announced plans to demerge its renewable energy business into associate company Adani Green Energy Ltd as part of simplifying overall business structure.

Post demerger scheme, which has been approved by the boards of the two companies, Adani Green Energy Ltd (AGEL) would be listed on the exchanges.

Adani Enterprises Ltd (AEL) has a renewable energy portfolio of 2,148 MW in India.

Announcing the scheme of arrangement for demerger of the renewable power undertaking into AGEL, Adani Enterprises said it would “simplify the business structure”.

The scheme would provide the shareholders of AEL direct shareholding in AGEL, “listing of the largest renewable Power Independent Power Producer (IPP) having a total portfolio of 2,148 MW in India, according to a statement.

The renewable power undertaking includes businesses of development of renewable power projects, generation of renewable power and trading and supply of solar and wind energy equipment. Under the proposed scheme, AGEL would issue 761 new equity shares for every 1,000 equity shares of AEL. The existing equity shares held by AEL in AGEL will be cancelled pursuant to the scheme, the statement said.

Subject to various regulatory approvals, the demerger is expected to be close by the first quarter of 2018. The date for the scheme has been fixed at April 1, 2018.

“The transaction is expected to unlock the value of renewable power undertaking currently embedded in the value of AEL by eliminating holding company discount and providing financial flexibility for raising capital for sustainable growth of renewable energy business,” AEL said in the statement.

Pursuant to the demerger, AGEL would be listed on the BSE and the NSE.

“It may, however, be noted that transaction may be completed earlier or later and the aforesaid period of first quarter of 2018 is only an indicative timeline and is subject to timely receipt of all applicable regulatory and statutory approvals,” it said.

PTI