Clarity on Reliance Power's deal with Jaypee group by Sept 25.

Clarity on whether Anil Ambani's Reliance Power will go ahead with the proposal to acquire Jaiprakash Power Ventures' hydro power portfolio will emerge by September 25.

The exclusivity period given to Reliance Power in the memorandum of understanding for the deal inked in July-end between the entities concludes on the said date.

The fate of the estimated Rs. 12,300-crore deal is delicately poised, as according to a banking source close to the development, 'The final valuation of the deal will naturally be dependent on the capacity and tariff as finally approved for the Karcham Wangtoo project as both are currently pending before Central Electricity Authority (CEA) and Central Electricity Regulatory Commission (CERC), respectively.' The deal was particularly important for the debt-laden Jaypee Group which is selling assets to reduce its loans. The group which has over Rs. 56,000-crore debt, plans to trim it by Rs. 15,000 crore in the current fiscal.

Analysts are quick to point out that exclusivity period can always be extended, but the two factors - capacity and tariff - will weigh on Reliance Power when taking a final call.


HBL