2 more power plants lined up for one-time settlement
Mumbai: Lenders have placed their hope on the resolution of two struggling thermal power plants, Coastal Energen and Jindal India Thermal operating in different parts of the country, through a so-called one-time settlement (OTS) with the promoters of these company backed by Deutsche Bank-led distressed funds. Banks are currently voting to settle about Rs 11,900 crore of debt through these deals at approximately less than half of the value which they lent in a desperate effort to clean up their books and get these assets up and running. OTS is the preferred route for banks to avoid a long drawn litigation via the National Company Law Tribunal (NCLT).
“The Coastal resolution is being planned in stages. The promoter has to bring in a total of Rs 300 crore in equity in two tranches. He has already brought in Rs 150 crore. Banks are now voting on the plan and we expect an outcome soon. We expect to conclude this deal before the end of this quarter,” said a person involved in the negotiations. Hong Kong based alternative investment fund SSG Capital and the distressed debt unit of Deutsche Bank are negotiating with banks.
