ICICI Fund Said to Be in Advanced Talks for Avantha Power Unit

A fund being set up by ICICI Bank Ltd.’s private-equity arm and Tata Power Co. is in advanced talks to acquire an electricity project from Avantha Power & Infrastructure Ltd., people familiar with the matter said.

The fund is in discussions to acquire Avantha’s Jhabua Power Ltd. unit and could reach an agreement on deal terms in the next month, one of the people said, asking not to be identified as the talks are confidential. The purchase may value the business at as much as 45 billion rupees ($709 million) including debt, the people said.

Avantha Power, backed by businessman Gautam Thapar, has been selling power projects as it seeks to reduce debt. It agreed in March to sell the Korba West power project in Chhattisgarh to Adani Power Ltd. for an enterprise value of 42.3 billion rupees.

ICICI Venture Funds Management Co., owned by India’s largest private-sector lender, and Tata Power are setting up a fund of at least $750 million targeting investments in the power sector, one of the people said. Tata Power, which said in March it’s seeking to acquire distressed assets to bolster capacity, would operate the electricity projects the fund purchases, according to the person.

 

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