India's Jaypee in Talks to Sell Power Plants for $2 Billion

NEW DELHI—Indian construction and power company Jaypee Group is in talks with a consortium led by the United Arab Emirates' Abu Dhabi National Energy Co. to sell two hydroelectric plants in north India for as much as $2 billion, according to people with knowledge of the deal. Jaypee, which is looking to unload assets to pay off debt, had initially considered selling a 51% stake in the hydro projects, but is now trying to sell 100% to the group led by Abu Dhabi National Energy, also known as Taqa, the Arabic word for energy, according to one of the people. "I can say the deal isn't far off," according to the second person familiar with the discussions. The deal is expected to be completed before the end of March, this person said. The Taqa-led consortium includes Canada's Public Sector Pension Investment Board andIDFC Alternatives, 532659.BY -0.92% an asset-management unit of Indian financing firm IDFC Ltd., the people said. Suren Jain, managing director of Jaypee Power Ventures Ltd., the unit of Jaypee Group which owns the power plants under discussion, didn't answer a call seeking comment. Taqa spokesman Allan Virtanen declined to comment. The Canadian pension fund and IDFC Alternatives didn't immediately respond to requests for comment. Taqa already owns a 100-megawattt hydroelectric power plant in the north Indian state of Himachal Pradesh, and operates a 250 megawatt lignite-based power plant in the southern state of Tamil Nadu. The Jaypee hydropower plants on the block are in Himachal Pradesh and together produce around 1300 megawatts of power. Consulting firm Ernst & Young LLP is advising Jaypee on the deal. Jaypee Group, which has interests in real estate, cement, roads, and built India's first Formula One track in Greater Noida, has been selling its assets to reduce debt. The group's debt stood at around $10 billion at the end of June, according to filings on the Bombay Stock Exchange. In September, Jaypee sold a cement plant in the western state of Gujarat for about $600 million. http://online.wsj.com/news/articles/SB10001424052702304558804579374481902762454?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304558804579374481902762454.html