Anil Agarwal’s Vedanta group, Torrent Power and state run Neyveli Lignite Corp have joined the race for acquiring a controlling stake in GMR Energy’s 1,370MW plant in Chhattisgarh. In all, five companies including Adani Power and JSW Energy have put in final bids for the project, industry sources said. Resurgent Power, backed by Tata Group, opted out of the bidding.
Axis Bank, which leads the consortium of lenders that invoked strategic debt restructuring (SDR), will now evaluate bids. “Stake sale is likely within this month as per SDR rules. The project will be awarded to the company that bids to absorb the maximum debt,” the sources said.
The consortium of 15 lenders including State Bank of India, Bank of India, Canara Bank, Bank of Baroda and HDFC Ltd in February last year converted the plant’s Rs 2,992 crore debt into equity as part of the SDR plan for change in management. The balance debt stands at about Rs 5900 crore. The banks own over a 52.4% stake in the plant and on December 29 sought interest from global and domestic players to offload equity.
The 2×685 mw coal-based power plant achieved commercial operations in March 2017. The project is stranded as it does not have power purchase agreements with state power distribution utilities, leading to cost overruns and lenders invoking SDR.
A senior JSW Energy official declined to comment.
The project won two coal blocks–Talabira -I mine in Odisha and Ganeshpur coal block in Jharkhand. However, the company had in mid-2017 approached the Delhi High Court seeking quashing of the government decision to cap fixed costs or permission to surrender the Talabira block without penalties. It filed a consequential petition after Monnet Ispat & Energy and Mandakini Exploration & Mining surrendered the non-producing mines they had won, following a favourable order from the court on their claim that they were not aware of the government’s plan on fixed costs at the time of bidding.
Sources said bankers had last year invited expressions of interest from bidders. More than 20 companies had responded and 10 were shortlisted. Auction process was later scrapped and fresh bids invited by the lenders in December.
