Hyderabad: Hyderabad-based GVK Power and Infrastructure Limited today said it has received a notice from APTransco stating that they have exercised their option to buy out its 217 mw (phase 1) power plant situated at Jegurupadu in East Godavari district in terms of the provisions specified under the power purchase agreement (PPA).
“The Power Purchase Agreement (PPA) signed by GVK Industries Limited, a step down subsidiary of the company with the erstwhile APSEB (now APTransco) stands expired by June 20, 2015 as it had completed its validity period of 18 years,” the company informed the stock exchanges in the light of the buyout notice.
Efforts to reach out to the GVK senior officials, including GVK PIL vice chairman G Sanjay Reddy, to know their response and any steps if they were contemplating in this regard, failed.
Last week, just a couple of days before the expiry of the PPA, Andhra Pradesh government has given its clearance to APTransco for its request to buy out the plant.
In the past the company officials maintained that the Rs 550 crore refurbishment plan submitted by the company to extend the contract period was on the higher side.
GVK had roped in Alstom, the original equipment supplier, to undertake renovation and maintenance of the project to extend the life of the plant. The plant has a potential to run for another 10 and more years post refurbishment.
In April this year the state power utility sought the government’s permission to buy out the plant, one of the options provided in the PPA.
AP Transco had engaged Grant Thornton to assess the plant’s terminal value, based on which the buy-out would be done. The firm had assessed the terminal value of the plant at Rs 294 crore, according to APTransco CMD K Vijayanand.
Jegurupadu phase 1 plant is the country’s first private power project, which was set up in 1997 after the Centre had allowed private sector participation in power sector.
