NTPC Limited — Capital/Financing Update 2020

Mar 26, 2020

Corporate Centre

Ref. No.: 01:SEC:NTPC Dated: 26/3/2020

General Manager Department of Corporate Services BSE Limited Floor 25, Phiroze Jeejeebhoy Towers Dalal Street Mumbai-400 001

Manager National Stock Exchange of India Limited Exchange Plaza Bandra-Kurla Complex Bandra(E) Mumbai-400 051

Sub.: Disclosure under Regulation 30 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and in continuation of our disclosures dated January 27, 2020, and March 20, 2020, this is to inform that the Company has, on March 25, 2020, executed a Share Purchase Agreement with the President of India for acquisition of legal and beneficial ownership of 3,60,98,09,800 equity shares held by the President of India in North Eastern Electric Power Corporation Ltd. (NEEPCO) and the acquisition of beneficial ownership in 600 equity shares held by the nominees of the President of India in NEEPCO (collectively representing 100% of the total paid up share capital of NEEPCO) for an aggregate consideration of INR 4000 crore (Rupees Four Thousand Crore only). The acquisition is subject to satisfaction of customary conditions precedent.

A detailed disclosure pursuant to Circular no. CIR/CFD/CMD/4/2015 dated September 9, 2015 issued by the Securities and Exchange Board of India (SEBI), is enclosed herewith.

This is for your kind information and records.

Thanking you.

Yours faithfully,

Sd/- (Nandini Sarkar) Company Secretary & Compliance Officer

Enclosed: as above

NTPC Limited

(A Govt. of India Enterprises) Corporate Centre

Disclosure by NTPC Limited pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Circular no. CIR/CFD/CMD/4/2015 dated September 9, 2015 issued by SEBI

Disclosure on execution of Share Purchase Agreement to acquire 100% of equity shares of North Eastern Electric Power Corporation Limited from the President of India

S. No.	Particulars	Details
1.	Name of the target entity, details in brief such as size, turnover etc.	The target entity, namely North Eastern Electric Power Corporation Limited ("NEEPCO") was incorporated on April 2, 1976 and is a Mini-ratna Category I Central Public Sector Enterprise. NEEPCO is primarily engaged in the business of generation and sale of electricity in the north-eastern region of India.
		As of March 31, 2019, the balance sheet size of NEEPCO stood at INR 15,073.28 Crore. The authorized share capital of NEEPCO is INR 50,00,00,00,000, and the total issued, subscribed and paid-up share capital of NEEPCO is INR 36,09,81,04,000. The total loan book of NEEPCO is INR 7052.07 Crore, with a turnover of INR 2,108.41 Crore and Profit After Tax of INR 213.94 Crore during 2018-19 (all figures on standalone basis).
2.	Whether the acquisition would fall within related party transaction(s) and whether the promoter/ promoter group/ group companies have any interest in the entity being acquired? If yes, nature of interest and	The President of India is the common promoter of both NTPC Limited (51.02%) and NEEPCO (100%) and is the seller of shares held by it in NEEPCO to NTPC Limited. The proposed transaction is thus a related party transaction between the Government of India and a government company, i.e. NTPC Limited within the meaning of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations") and the Companies Act, 2013 ("Act").
	details thereof and whether the same is done at "arm's length"	SEBI has granted necessary exemption from the application of Regulations 23(2) and 23(4) of the LODR Regulations to NTPC Limited for this proposed transaction vide its letter dated February 18, 2020.
		Section 188(1) of Act read with Rule 15(3) of the Companies (Meetings of Board and its Powers) Rules, 2014 ("Rules") specifies the limits for transactions beyond which a related party transaction shall require approval of the shareholders. Ministry of Corporate Affairs has vide Notification No. G.S.R. 463(E), dated June 5, 2015, read with notification dated March 2, 2020 inter alia exempted the application of the first and second proviso to Section 188(1) of the Act to contracts or arrangements entered into by a Government company with the Central Government.
		The proposed transaction between NTPC Limited (a Government Company) and the Government of India (Central Government) is thus exempt from the requirement of taking approval from

NTPC Limited

(A Govt. of India Enterprises)

		Corporate Centre
		shareholders under Section 188(1) of the Act.
		The proposed transaction is at arm's length price.
3.	Industry to which the entity being acquired belongs	Power
4.	Objects and effects of acquisition (including but not limited to, disclosure of reasons for acquisition of target entity, if its business is outside the main line of business of the listed entity)	The Cabinet Committee on Economic Affairs ("CCEA") in its meeting held on November 21, 2019, granted an 'in-principle' approval to the proposal of the Department of Investment and Public Asset Management, Ministry of Finance, Government of India, for the strategic disinvestment of Government of India's shareholding in NEEPCO to NTPC Limited along with transfer of management control. In furtherance to the said decision of the CCEA, the Board of Directors of NTPC Limited vide resolution dated January 27, 2020 granted an in-principle approval for the acquisition of the entire stake held by the Government of India in NEEPCO. Subsequently, requisite approvals were obtained from SEBI and the Competition Commission of India ("CCI"). The takeover of NEEPCO i.e. primarily a hydropower generating company would not only give a foothold to NTPC in the north eastern regions but also help unlock potential synergies with many of its existing projects. Further, NTPC will also gain through deep domain expertise in developing hydropower projects in difficult terrains such as the North-eastern region of the country. NTPC has conducted a thorough evaluation of the said transaction and the same will benefit NTPC as acquisition will provide access to north eastern region of India where NEEPCO is a dominant player. NEEPCO has operational portfolio of 1457 MW comprising hydro power generation capacity of 925 MW, gas based generation capacity of 527 MW and Solar generation capacity of 5 MW. Additionally, 600 MW Kameng Hydro Electric Project is likely to be commissioned soon.
5.	Brief details of any governmental or regulatory approvals	1. The CCEA has provided its in-principle approval for the proposed acquisition on November 21, 2019;
	required for the acquisition	2. SEBI has granted exemption dated February 18, 2020 for exemption from obtaining audit committee and shareholders' approval for related party transaction under Regulations 23(2) and 23(4) of LODR Regulations; and 3. CCI has granted approval dated February 24, 2020 under Section 31(1) of the Competition Act, 2002.
6.	Indicative time period for completion of the acquisition	On or before March 31, 2020.

(A Govt. of India Enterprises)

		Corporate Centre
7.	Nature of consideration - whether cash consideration or share swap and details of the same	Cash consideration.
8.	Cost of acquisition or the price at which the shares are acquired	INR 11.08 (Rupees eleven and eight paise only) per share and total consideration of INR 4000 crore (Rupees Four Thousand Crore only).
9.	Percentage of shareholding/ control acquired and/ or number of shares acquired	Acquisition of legal and beneficial ownership of 3,60,98,09,800 Equity Shares of face value of INR 10 per share and the beneficial ownership in 600 Equity Shares of face value of INR 10 per share, collectively amounting to 100% of the total paid up capital of NEEPCO.
10.	Brief background about the entity acquired in terms of products/ line of business acquired, date of incorporation, history of last 3 years turnover, country in which the acquired entity has presence and any other significant information (in brief)	Name: North Eastern Electric Power Corporation Limited Date of Incorporation: 02.04.1976 CIN: U40101ML1976GOI001658 Whether listed: The Equity Shares of NEEPCO are unlisted. The corporate bonds of NEEPCO are listed on the BSE Limited. Line of business: Power generation Country of presence: India Turnover during last three years: FY 2016-17- INR 1429.77 Crore, FY 2017-18 – INR 1664.67 Crore, FY 2018-19 – INR
		2108.41 Crore

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