The Board of Directors of Tata Power has approved issuance of 49,05,66,037 Equity shares on a preferential basis to Tata Sons Private Limited ('Tata Sons') for an aggregate consideration of Rs. 2,600 crore.

The issue price for the Equity shares has been fixed at Rs. 53 per Equity share representing a 15% premium to yesterday's closing price.

Tata Sons' shareholding will increase from 35.27% to 45.21% on allotment of Equity shares pursuant to the preferential issue. Consequently, Tata Group's shareholding will increase from 37.22% to 46.86%.

Tata Power is working on a strategic turnaround plan to strengthen the fundamentals of the Company through a mix of divestment and business restructuring that will deleverage the balance sheet and improve the capital structure of the Company. These actions are expected to improve the fundamentals and lead to improvement in long term shareholder value.

The long-term strategic plan involves reducing debt thereby strengthening the balance sheet and improving overall return metrics through: Divestment of non-core and certain overseas investments; Restructuring of some of its businesses to unlock value and simplify the structure of the Company and its subsidiaries. Consequent to this, the Company has decided to pursue setting up of InvIT for its renewables business and Raising of equity to reduce unsustainable debt in Tata Power and/or its subsidiaries.

The Promoters of the Company are fully supportive of the plan and are willing to back the Company. The support of Tata Sons signals their strong conviction in the future prospects of the Company. This benefits all shareholders by reducing debt, allowing the business to continue to invest and execute its long-term growth strategy.

The Annual General Meeting of the shareholders will be held on 30th July 2020 wherein the Company will seek shareholders' approval for the preferential issue.

Commenting on the fund raising plan approved by the Board, Mr. Praveer Sinha, CEO & MD, Tata Power said, 'This equity raise demonstrates the confidence reposed by the Tata Group in the Company's capabilities and further strengthens the effort to reduce debt & capitalize the Company to invest in future growth. Similarly, the Board's in-principle approval for setting up of an InvIT, is another important step towards restructuring the renewables business and unlocking value. This along with the divestment of various non-core and overseas assets will help in deleveraging in preparation for an ambitious growth plan over the next decade.'

About Tata Power

Tata Power is India's largest integrated power company and, together with its subsidiaries & jointly controlled entities, has an installed/ managed capacity of 12,742 MW. A pioneer in the field, it has a presence across the entire power value chain - generation of renewable as well as conventional power including hydro and thermal energy, transmission & distribution, trading and coal & freight logistics. With nearly 2.6GW of renewable energy assets in solar and wind accounting for 30% of the company's portfolio, Tata Power is a leader in clean energy generation. In line with the company's view on sustainable and clean energy development, Tata Power is steering the transformation of utilities to integrated solutions by looking at new business growth in EV charging & storage, distributed generation & rooftops, micro grids and home automation & smart meters. It has successful public-private partnerships in generation, transmission & distribution in India, namely 'Tata Power Delhi Distribution Ltd.' with Delhi Vidyut Board for distribution in North Delhi; 'Tata Power Ajmer Distribution Ltd.' with Ajmer Vidyut Vitran Nigam Ltd. for distribution in Ajmer; 'Powerlinks Transmission Ltd.' with Power Grid Corporation of India Ltd. for evacuation of Power from Tala hydro plant in Bhutan to Delhi; 'Maithon Power Ltd.' with Damodar Valley Corporation for a 1050 MW Mega Power Project at Jharkhand. Tata Power is serving more than 2.6 million distribution consumers in India and has developed the country's first 4000 MW Ultra Mega Power Project at Mundra (Gujarat) based on super-critical technology. On 1st June, 2020, Tata Power has formally commenced its Joint Venture with Govt of Odisha for distribution and retail supply of electricity in Odisha's five circles consisting of Bhubaneshwar, Cuttack, Puri, Paradeep and Dhenekal. Tata Power holds 51 percent equity with management control in TP Central Odisha Distribution Limited.

Contact:

Email: shalinis@tatapower.com

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