Tata Power has received the Letter of Intent (LOI) for supplying electricity to the consumers of two electricity distribution companies (discoms) in Odisha i.e. the Western Electricity Supply Company of Odisha (WESCO) and the Southern Electricity Supply Utility of Odisha (SOUTCO).
WESCO supplies electricity to consumers in the distribution circles of Rourkela, Burla, Balgarh, Bolangir and Bhawanipatna, while SOUTCO serves Behrampur, Aska, Bhanjanagar, Jeypore and Rayagada.
The proposed sale of WESCO Utility and SOUTHCO Utility to Tata Power will be through the formation of a Special Purpose Vehicle (SPV) entity in which the Government of Odisha will own 49 per cent and Tata Power will hold the remaining 51 per cent stake, with management control, Tata Power said in a regulatory filing.
The expected annual revenue of the SPV created for WESCO will be in excess of Rs 3,300 crore and SPV created for SOUTHCO will be more than Rs 1,200 crore, Tata Power added.
Tata Power had, last December, won a 25-year licence for distribution and retail supply of power in five circles of Central Electricity Supply Utility of Odisha (CESU Odisha).
A consortium of India Power Corporation and French government-owned power utility Electricite de France (EDF) were the only other bidders for WESCO and SOUTCO respectively. However, their bids were rejected on technical grounds.
Tata Power shares were outperforming the Sensex in noon trading. At 12:55 pm, the shares of Tata Power were trading higher by 1 per cent at Rs 72.40 as against a 0.6 per cent rise in the benchmark BSE Sensex index.