Adani Group eyes Brakel stake in Himachal power projects

NEW DELHI: Brakel Corporation NV of Netherlands is in talks with various parties, including the Adani Group, for inducting a strategic partner for the Jangi-Thopan and Thopan-Powari twin hydro-electric projects, which together have a capacity of 960 MW, in Himachal Pradesh.

A project of this size attracts a valuation of more than Rs 4,000 crore when it goes operational. Sources in the Adani Group said they would like to pick up a stake in the project after the ongoing litigation over these projects is resolved.

According to rules laid down by the Himachal Pradesh government, Brakel can offload up to 49% stake in the twin projects but only after obtaining prior permission from the state government.

A Himachal government official said Brakel had not put in any request for clearance to induct a partner. While the Netherlands-based company could not be contacted, sources in the Adani Group confirmed that the two sides had discussed a partnership. They may be talking to other potential partners too, the sources said.

Adani Group is adopting a wait and watch strategy since the Jangi-Thopan and Thopan-Powari project is facing turbulence due to default by Brakel in paying the ���premium��� of Rs 173 crore to the Himachal Pradesh government. After a delay of more than two years, the ���premium��� amount was paid recently after the state government served a notice on the Dutch company, threatening to scrap the award of the project.

Apart from the delay in paying the premium, the state government has also accused Brakel of keeping it in the dark about Brakel Kinnaur Power, a company formed by the Netherlands-based entity for implementing the project.

The principal secretary of Himachal power department has, in a recent missive, asked Brakel to disclose its source of funds and submit details about directors, paid-up capital and shareholding pattern. The balance sheet and audited accounts of the company for the past three years has also been summoned.

Officials of the state government feel that Brakel may be inducting a partner through the back door without informing the Himachal government. The company, on its part, has said the funds deposited with the state government have been raised as equity bridge financing.

This, the officials feel, indicates that a potential partner has provided advance to Brakel for payment of ���premium��� and this would be converted into equity once the project is taken over. This amounts to inducting a partner without the state government���s prior permission and not disclosing the source of funds has attracted the attention of the revenue department.

The state government has said the show cause notice issued to Brakel can be withdrawn if the Netherlands-based company agrees to certain conditions. It is understood that Brakel is willing to agree on most of the points except disclosing source of funds.

Award of the project is also under litigation, official of the Himachal government said. The Netherlands-based company had earlier claimed that it was facing restrictions in bringing foreign funds into India.

However, the Himachal government checked Reserve Bank of India guidelines to find there were no such restrictions.