JSW En­ergy to up ante in Praya­graj Power bid

JSW EN­ERGY TO UP ANTE IN PRAYA­GRAJ BID

Financial Chronicle - - FRONT PAGE - SUB­HASH NARAYAN

JSW En­ergy plans to take its bat­tle with the Tatas for con­trol of Prayagraj Power Gen­er­a­tion to the NCLT once the cred­i­tors be­gins bank­ruptcy pro­ceed­ings against the stressed power project. JSW En­ergy COO Sharad Ma­hen­dra said the com­pany re­mained in­ter­ested in projects hav­ing proper fuel link­age and power pur­chase agree­ments.

JSW En­ergy plans to take its bat­tle with the Tatas for con­trol of Prayagraj Power Gen­er­a­tion to the NCLT once the cred­i­tors be­gins bank­ruptcy pro­ceed­ings against the stressed power project.

JSW En­ergy chief op­er­a­tion of­fi­cer Sharad Ma­hen­dra said that the com­pany re­mained in­ter­ested in projects hav­ing proper fuel link­age and power pur­chase agree­ments (PPAs) and Prayagraj Power falls in that cat­e­gory. The 1980 MW su­per­crit­i­cal coal-based power project in Ut­tar Pradesh has all ap­provals and clear­ances in place along with long-term PPAs and fu­el­sup­ply agree­ment.

“If we are given the op­tion, we would be in­ter­ested in bid­ding afresh for Prayagraj once the as­set lands in the Na­tional Com­pany Law Tri­bunal (NCLT) for res­o­lu­tion un­der the terms of the new bank­ruptcy code,” Ma­hen­dra said. JSW En­ergy and Tata Power/ICICI Ven­ture-pro­moted Resur­gent Power Ven­ture has been in­volved in­tense bid­ding bat­tle to take con­trol of Prayagraj, a Jaypee Group com­pany.

JSW’s Rs 5,600-crore bid in the first round was ear­lier de­clared as the high­est and was is­sued let­ter of in­tent but Resur­gent Power, in which Tata Power is a share­holder, snatched the deal by of­fer­ing Rs 6,000 crore. JSW bet­tered this later to about Rs 6,200 crore, but the lenders did not con­sider it.

Un­der the SC’s di­rec­tions, Prayagraj now faces ac­tion un­der the In­sol­vency and Bank­ruptcy Code (IBC), if the lenders are un­able to re­solve the case by Novem­ber 14, the next date for hear­ing the mat­ter per­tain­ing to stressed power as­sets by the apex court.

“NCLT is not the end of the road for our in­ter­est in the power project. If cred­i­tors de­cide, they can take out an as­set from NCLT with a 90 per cent ma­jor­ity,” Ma­hen­dra said. JSW’s in­ter­est in the project could be seen in its sec­ond bid for the power project. The com­pany not only of­fered up­front pay­ment of Rs 6,200 crore but sources said it also in­creased the eq­uity is­suance to lenders to 15 per cent from 13.9 per cent of­fered ear­lier. It also of­fered to take care of the tax li­a­bil­i­ties in ad­di­tion to the up­front pay­ment.

Sin­ga­pore­based Resur­gent Power, in which Tata Power holds is 26 per cent, has also been ag­gres­sive about the Prayagraj Power as the project of­fers im­mense value to the en­tity.

Lenders led by the SBI are try­ing to sell the as­set out­side the purview of in­sol­vency pro­ceed­ings un­der NCLT, but sources said that it is un­likely to strike a deal be­fore the cut-off date. Lenders had ac­quired a ma­jor­ity stake in Prayagraj by con­vert­ing debt of Rs 11,000 crore into eq­uity. The pro­moter com­pany Jaiprakash As­so­ciates cur­rently owns 11 per cent stake. Prayagraj forms part of 34 stressed power projects with a com­bined ca­pac­ity of 40,000 MW iden­ti­fied by the fi­nance min­istry for res­o­lu­tion. Projects like GMR Ch­hat­tis­garh En­ergy, KSK Ma­hanadi, Es­sar Ma­han, RKM Pow­er­gen, Rat­tanIn­dia Am­ra­vati and Nashik are other projects await­ing lenders’ nod to com­plete res­o­lu­tion oth­er­wise they will land in NCLT.

1989 MW su­per-crit­i­cal project has fuel link­ages and longterm PPAs

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