In first deal outside NCLT, RattanIndia rescued by foreign funds; lenders take 38% haircut

In the first instance of resolution of a stressed power asset outside the insolvency and bankruptcy code (IBC) mechanism where the promoters have retained management control, a consortium of lenders led by Power Finance Corporation (PFC) has agreed to take a 38% haircut against their exposure of Rs 6,575 crore to RattanIndia Power’s 1,350 MW Amravati plant.

Aditya Birla Asset Reconstruction Company (ARC) will take over the power plant’s balance Rs 4,050-crore debt with funding from foreign funds including Goldman Sachs and Varde Partners. After this arrangement, the old lenders’ consortium and the ARC will own 15% each in RattanIndia Power. A 15% stake in the firm is worth a little over Rs 800 crore at current market prices. The promoters hold 53% in RattanIndia Power.