Tata Power cancels energy InvIT deal with Malaysia’s Petronas

Tata Power's subsidiary Tata Power Renewable Energy Ltd (TPREL), has terminated its discussions with Malaysian oil and gas company Petroliam Nasional Berhad (Petronas) after a year-long negotiation to raise capital for its renewable energy business through a proposed infrastructure investment trust (InvIT). The talks had led to an understanding, with Petronas agreeing to invest Rs 3,500-Rs 3,800 crore for about 30-35% stake in the InvIT at an enterprise value of Rs 18,813 crore. Besides Petronas, other institutional and financial investors were also to come on board in the future to invest in the InvIT. TPREL decided to terminate the deal last week when both sides were in the final stages of discussions for negotiating a binding term sheet, a prominent media source had reported. Tata Power is now looking for an initial public offering (IPO) of its renewable energy division. The company plans to create a separate entity that will hold the renewable projects along with rooftop solar projects and electric charging stations. Last year, TPREL initiated talks to raise Rs 3,762 crore-Rs 5,643 crore for its renewable energy platform. The decision was expected to reduce Tata Power's net debt to Rs 25,000 crore from over Rs 36,000 crore. Tata Power share prices plunged 6% after the announcement. Image Source Also read: Tata Power Solar doubles solar cells, modules manufacturing to 1.1 GW Also read: World Bank to offer $648 mn to India for rooftop solar