NTPC Inks Agreement to Transfer Coal Mining Business to NTPC Mining Ltd

18 Aug 2023 , 01:21 AM

State-owned power conglomerate NTPC has taken a significant step towards streamlining its operations by signing a Business Transfer Agreement (BTA) on August 17, 2023. The agreement paves the way for the separation of its mining business, which encompasses six coalfields, to its subsidiary NTPC Mining Ltd. 

NTPC Ltd and NTPC Mining Ltd (NML) formalized the Business Transfer Agreement (BTA) on August 17, 2023, in New Delhi. The effective implementation of the BTA is contingent upon fulfilling the conditions precedent specified within the agreement.

In a prior disclosure on July 29, 2023, NTPC informed the stock exchanges about its board’s endorsement for divesting its coal mining business. This business division comprises six coal mines and associated assets and liabilities. The business transfer is set to occur through a Business Transfer Agreement with NTPC Mining Ltd, an arm of NTPC.

The business transfer involves hiving off the coal mining business, inclusive of the six coal mines, from NTPC’s financial records to NTPC Mining Ltd (NML). This strategic move received the green light from both the Audit Committee and the Board of Directors.

The transaction’s valuation stands at Rs 7,794.99 crore, determined based on the book value as per the Audited Financials ending March 31, 2023. The payment for this transaction will be executed through a combination of cash, equity shares, and debt liability.

The final consideration amount will be subject to adjustments based on the revised balance sheet of the coal mining business as of the transfer completion date. The revenue generated by the Coal Mining Business, slated for transfer, reached Rs 4,011.93 crore in the fiscal year 2022-23. This figure constitutes 2.25 % of NTPC’s consolidated revenue, amounting to Rs 1,77,977.17 crore for FY23.

The net worth of the coal mining business is reported as Rs 7,794.99 crore as of March 31, 2023. This accounts for 5.30 % of NTPC’s net worth, which totals Rs 1,47,023.17 crore (attributable to owners on a consolidated basis) as of the same date. 

For feedback and suggestions, write to us at [e-mail]