NTPC Limited — Capital/Financing Update 2020

Mar 26, 2020

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NTPC Limited

(A Govt. of India Enterprises) Corporate Centre

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

General Manager Manager Department of Corporate Services National Stock Exchange of India Limited BSE Limited Exchange Plaza Floor 25, Phiroze Jeejeebhoy Towers Bandra-Kurla Complex Dalal Street Bandra(E) Mumbai-400 001 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, 2019, 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

Registered office: NTPC Bhawan, SCOPE Complex, & Institutional Area, Lodhi Road, New Delhi-110003 CIN:L40101DL1975GOI007966, Telephone: 011-24387333 FAX: 011-24361018, Email: ntpccc@ntpc.co.in Website: www.ntpc.co.in,

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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 details thereof and whether the same is done at “arm’s length”	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”). 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

Registered office: NTPC Bhawan, SCOPE Complex, & Institutional Area, Lodhi Road, New Delhi-110003 CIN:L40101DL1975GOI007966, Telephone: 011-24387333 FAX: 011-24361018, Email: ntpccc@ntpc.co.in Website: www.ntpc.co.in,

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NTPC Limited

(A Govt. of India Enterprises)

Corporate Centre

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shareholders under Section 188(1) of the Act.
The proposed transaction is at arm’s length price.
3. Industry to which the Power
entity being acquired
belongs
4. Objects and effects of The Cabinet Committee on Economic Affairs (“ CCEA ”) in its
acquisition (including meeting held on November 21, 2019, granted an ‘in-principle’
but not limited to, approval to the proposal of the Department of Investment and
disclosure of reasons Public Asset Management, Ministry of Finance, Government of
for acquisition of target India, for the strategic disinvestment of Government of India’s
entity, if its business is shareholding in NEEPCO to NTPC Limited along with transfer
outside the main line of of management control. In furtherance to the said decision of the
business of the listed CCEA, the Board of Directors of NTPC Limited vide resolution
entity) 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 1. The CCEA has provided its in-principle approval for the
governmental or proposed acquisition on November 21, 2019;
regulatory approvals
required for the 2. SEBI has granted exemption dated February 18, 2020 for
acquisition 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 On or before March 31, 2020.
for completion of the
acquisition
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Registered office: NTPC Bhawan, SCOPE Complex, & Institutional Area, Lodhi Road, New Delhi-110003 CIN:L40101DL1975GOI007966, Telephone: 011-24387333 FAX: 011-24361018, Email: ntpccc@ntpc.co.in Website: www.ntpc.co.in,

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NTPC Limited

(A Govt. of India Enterprises)

		NTPC Limited (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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Registered office: NTPC Bhawan, SCOPE Complex, & Institutional Area, Lodhi Road, New Delhi-110003 CIN:L40101DL1975GOI007966, Telephone: 011-24387333 FAX: 011-24361018, Email: ntpccc@ntpc.co.in Website: www.ntpc.co.in,