Tata Power calls off acquisition of Ideal Energy's plant Maharashtra

MUMBAI: Tata Power Company has called off the acquisition of Ideal Energy Project’s 270 MW power unit in Maharashtra citing non-fulfilment of conditions. In December 2014, the company had entered into a share purchase agreement with Ideal Energy for the acquisition that would have given the Tata Group utility an opportunity to expand that plant to 540 MW. The acquisition was subject to certain conditions. "As per the terms of share purchase agreement, the acquisition was subject to fulfilment of certain conditions precedent.

The company made all efforts to arrive at a workable solution to salvage a stressed asset along with key stakeholders. However, the stakeholders could not conclude, leading to non-fulfilment of the aforesaid conditions precedent," Tata Power said in a statement on Monday.

Dattatray Pandurang Mhaiskar, who started as a road builder and is the father of IRB Infrastructure’s promoter and chairman Virendra Mhaiskar, set up Ideal Energy which has been up for sale since 2010-11. The project was mired in controversy due to the promoter’s links with Union transport minister Nitin Gadkari. Ideal Energy commissioned its 270 MW capacity in May 2013. At the time of the deal Tata Power had not disclosed the financial consideration.

The acquisition was the only new investment Tata Power planned in conventional energy. The company has adopted a strategy of focusing more on renewable energy in India given the problems faced by convectional power projects. It has also been expanding its overseas presence.