Adani Power's Rs 7,017 crore deal to buy DB Power assets falls through

Adani Power’s Rs 7,017 crore plan to acquire DB Power has fallen through as the deadline to complete the transaction has expired.

In a filing, the company on Wednesday said that the long-stop date under the Memorandum of Understanding (MoU) has expired. 

"We wish to inform that the long stop date under the memorandum of understanding dated August 18, 2022, has expired," Adani Power said.

The companies had signed an agreement on August 18, 2022, according to which the initial term of the MoU was till October 31, 2022, reported the Business Today.

However, on October 31, the deadline was changed by the companies to November 30. On November 30, the deadline was pushed to December 31, and subsequently to January 15 and then February 15. 

This development comes in the wake of the incriminating report released by Hindenburg Research on the Adani Group, accusing it of stock manipulation and accounting fraud.

DB Power owns and operates a 2x600 MW thermal power plant at Janjgir Champa district of Chhattisgarh. Diligent Power Private Ltd is the holding company of DB Power. 

After the completion of the deal, Adani Power was to hold 100 per cent of the total issued, subscribed and paid-up equity share capital and preference share capital of DPPL.

Trinamool Congress leader Mahua Moitra in her tweet has pointed out that "Adani Power's Rs 7,000 crore deal to buy DB Power assets collapses. Overleveraged, non liquid Adani needs to pare down assets. True cost of capital for company far higher. Huge risk in stock."