Adani Power stock steady after subsidiary and Gujarat Urja Vikas Nigam agree to resolve all disputes relating to PPA

14 Feb 2022 , 11:07 AM

Adani Power Limited updated the exchanges on the deed of Settlement signed by Adani Power (Mundra) Limited (APMuL), a wholly-owned subsidiary of the company with Gujarat Urja Vikas Nigam Ltd. (GUVNL). 

APMuL and GUVNL have agreed to resolve all disputes pertaining to Power Purchase Agreements (PPAs) dated February 2, 2007 (Bid-2 PPA) and February 6, 2007 (Bid-1PPA), and Supplementary PPAs ("SPPAs") dated December 5, 2018, connected to both these PPAs, in a comprehensive and amicable manner and withdraw all related pending cases/petitions, claims filed by either side against each other.

They have also agreed to revive the canceled Bid-2 PPA and its connected SPPA, which stood terminated by virtue of decision of the Supreme Court dated July 2, 2019 and in turn, APMuL and GUVNL to not claim any compensation in terms of the said judgment in relation to termination of Bid-2 PP.

In pursuance of the above, APMuL and GUVNL had jointly approached the Supreme Court to place on record the Settlement Deed signed between them and for disposal of GUVNL's curative petition pertaining to the Court's judgment dated July 2, 2019, in terms of the Settlement.

The Supreme Court has disposed of the curative petition filed by GUVNL by its order dated February 8, 2022, which has now been uploaded on its website, and noted that the parties would be bound inter se in terms of the settlement agreement.

Consequent to this development, both parties will now approach the CERC for approval of the amendment in the terms of both SPPAs, as agreed to in the Settlement agreement.

Recommencement of supply of power under the amended terms of the Bid-2 PPA will allow the consumers of Gujarat access to reliable and affordable electricity, while the settlement reached between APMuL and GUVNL will aid APMuL with optimal utilization of Mundra power plant capacity by smooth operation of both PPAs and timely recovery of dues thereafter, for entire term of the original PPA.

The company stock was steady despite bearish markets on Monday. At around 10.58 am, Adani Power Ltd iwas trading at Rs124.25 per share down by Rs0.55 or 0.44% from its previous closing of Rs124.80 per share on the BSE.