After steel, JSW, Tat as in power battle
Sajjan Jindal firm ups offer for Prayagraj a day after Tata Power JV gets LoI
Sajjan Jindal's JSW Group is doing an encore in power with Prayagraj Power Generation Company (PPGCL) against the Tatas as it has done in steel with Bhushan Power & Steel.
A day after Tata Power said the lenders to PPGCL had issued a letter of intent (LoI) to Resurgent Power Ventures Pte for a 75.01 per cent stake, JSW Energy wrote to the lead lender, SBI, revising its offer. The new offer entails an upfront payment upwards of ~60 billion, factoring in tax liabilities and 15 per cent equity to the lenders. JSW’s letter was sent Thursday evening, said sources close to the development.
Resurgent Power is a joint venture based out of Singapore in which Tata Power holds a 26 per cent stake through its wholly owned Singapore-based subsidiary, while the balance 74 per cent is owned by ICICI Venture and others.
Resurgent Power and JSW Energy were in the fray for the stressed power asset. The upfront payment offered by the two companies was understood to be the same at ~60 billion. JSW's revised offer, however, is upwards of ~60 billion, besides including more equity for the lenders and factoring in tax concerns. The latter two parameters had helped the Tata Power JV score over JSW.
The letter also mentions that, if required, JSW is open to revising its offer further and will discuss the same with the lenders. The total outstanding debt of the company, formerly promoted by Jaiprakash Associates, was understood to be ~110 billion. PPGCL is a 3X660MW coal-based power project in UP.
Lenders are likely to meet on Friday to discuss JSW’s revised offer, said sources. Since the asset is outside of the National Company Law Tribunal, decision making is likely to be quicker, they said.
It would not be the first time, though, that the two groups would be locking horns over stressed assets.
In the case of Bhushan Power & Steel, mandated by the RBI for debt resolution under the Insolvency and Bankruptcy Code (IBC), JSW Steel had revised its bid at the last minute, which prompted a rebid in the case. JSW Steel had revised its bid from ~110 billion, submitted in February, to ~180 billion ahead of a meeting of committee of creditors (CoC) to take a final call on the bids. But Tata Steel moved the National Company Law Appellate Tribunal (NCLAT), which asked the CoC to decide on the existing resolution plans. Accordingly, Tata Steel was selected as the highest qualified bidder. It was not the first time that Tata Steel had been selected so, however. In end-June, lenders formally communicated to Tata Steel that it had been selected. However, fresh submissions from operational creditors and Liberty House stayed the voting on the resolution plan. Later, the NCLAT decided to allow revised bids, but Tata Steel moved the Supreme Court. The apex court, however, refused to stay the process.