Goyal Gases makes the highest bid for JPL

New Delhi-based industrial gases producer Goyal MG Gases Pvt. Ltd (GMGPL) has emerged as the highest bidder for Jhabua Power Ltd (JPL), a unit of Gautam Thapar-promoted Avantha Power and Infrastructure, two people aware of the development said.

GMGPL has agreed to pay ₹2,350 crore in enterprise value for a controlling stake in JPL which was auctioned by a consortium of lenders led by Axis Bank, the people cited above told Mint.

GMGPL, a late entrant in the race, outbid rivals such as Adani Power, Resurgent Power Ventures Pte Ltd, Edelweiss Asset Reconstruction Co. (ARC) and Phoenix ARC. JPL was put up for sale in the first week of May. The lenders hold close to 61% of JPL’S pledged shares while the remaining stake is with the Avantha group, said the second person cited above.

“Goyal Gases has furnished the necessary bank guarantees sought by the lenders and is expected to sign the asset transfer agreement in the coming week,” said the first person cited above.

“The company has tied up funding from several investors including some foreign banks and private equity funds,” the person added. “As a matter of policy, Axis Bank does not comment on client-specific matters,” a spokesperson for the bank said

GMGPL HAS AGREED TO PAY ₹2,350 CRORE IN ENTERPRISE VALUE FOR A CONTROLLING STAKE IN JHABUA POWER LTD

in response to a query from Mint.

An email sent to the senior management of GMGPL remained unanswered until press time.

Founded by entrepreneur S.C. Goyal in 1973, GMGPL is a closely held company and manufactures and trades in industrial gases. The company is also involved in renewable power generation and has a 26.8 megawatt (MW) wind plant in Tamil Nadu.

GMGPL is part of Goyal Group of companies which also has presence in finance and real estate in Northern India. Mint had reported on April 24 that Edelweiss ARC and Phoenix ARC (part of Kotak Mahindra group) were in talks to buy close to ₹4,300 crore of loans of JPL from the lenders’ consortium. JPL has 600 megawatts (MW) of fully operational thermal capacity at its plant in Madhya Pradesh with an additional 660MW under implementation.

The plant has long-term power purchase agreements for 71% of its total generation, with Madhya Pradesh and Kerala buying 35% and 36% respectively. It has fuel linkage with Coal India Ltd.

In 2014, Avantha Power sold its Korba power plant to Adani for ₹4,200 crore.