CESC subsidiary gets Letter of Intent for Rs 871 crore deal to acquire Chandigarh power distribution after 3-year delay

Kolkata: After a nearly three-year wait because of legal wrangles, Eminent Electricity Distribution Ltd, a subsidiary of CESC Ltd, has received the Letter of Intent (LOI) for acquiring 100 per cent equity in a company responsible for electricity distribution and retail supply in Chandigarh.

CESC, part of the RP-Sanjiv Goenka Group, had emerged as the highest bidder for the Rs 871-crore deal, securing the tender for the Chandigarh distribution business in 2021. However, the privatisation bid was challenged by trade unions.

The Punjab and Haryana High Court recently dismissed the petition filed by employees of the Chandigarh Power Department, clearing the way for privatising power distribution services in the union territory.

“We write to inform you that Eminent Electricity Distribution Ltd, a wholly-owned subsidiary of CESC Ltd, has received a Letter of Intent for acquiring 100 per cent shares in a distribution company responsible for electricity distribution and retail supply in the Union Territory of Chandigarh,” the company informed bourses on Friday.

The transaction, valued at Rs 871 crore, is subject to conditions outlined in the LOI and is expected to be completed within 30 days, the company said.

The financial bidding process saw CESC outbidding competitors such as Torrent Power, NTPC Ltd, and ReNew Power, which had quoted Rs 606 crore, Rs 563 crore, and Rs 551 crore respectively, and some other players like Adani, Tata Power and Sterlite.

CESC is already engaged in power distribution in cities like Noida (Uttar Pradesh), Kota, Bikaner and Bharatpur (all Rajasthan), and Malegaon (Maharashtra), apart from Kolkata and Howrah in West Bengal.

The company reported a 1.4 per cent year-on-year rise in its net profit to Rs 353 crore for the quarter ending September 30, 2024.