Tata Power Company Ltd signed a share purchase agreement with the Government of Delhi, for acquisition of a 51 per cent stake in the North North-West Delhi Distribution Co Ltd from Delhi Power Company Ltd on Thursday.

With the privatisation of the three power distribution companies of the Delhi Vidyut Board (DVB), the 51 per cent stake in two of DVB’s arms were given to BSES and the third to Tata Power, for a total consideration of Rs 481 crore.

The company has managing control of the North North-West Delhi Distribution Company Ltd with effect from July 1, 2002 and the remaining 49 per cent remains with Delhi Power Co. The north, north-west Delhi region, with predominantly industrial load consumption, has a consumer base of approximately 7.5 lakh with an annual power consumption of around 5000 MU’s. Tata Power deputy managing director Firdose Vandrevala said: "We understand the enormity and importance of the task. This will be achieved by improvement in business practices, procedures and technologies. In this effort we seek the co-operation of the citizens of Delhi."

Tata Power has paid Rs 187 crore for the north and north-west Delhi firm. The company has also agreed to reduce the total loss in its distribution firm by 17 per cent within the next five years.

Tata Power managing director Adi Engineer told The Financial Express: "We have to take corrective measures both internally and externally, which is why we have not gone overboard with our claims of loss reduction. We are targeting only 0.5 per cent improvement in the first year since it is a settling period and in the next five years, a
17 per cent improvement."

DVB has been split into six companies, including the three distribution companies, a holding company, a generation and a transmission company.

An official release had earlier stated that going by the asset-value method, the valuation of the DVB worked out at Rs 3,160 crore, while its book value, based on unaudited accounts, stood at
Rs 3,024 crore.