NEW DELHI: Tata Power and ICICI Bank-backed Resurgent Power, Adani Power, JSW Energy and Vedanta Plc are eyeing a large chunk of stressed power assets at half of the projects’ cost as lenders rush to close deals ahead of August 27 deadline.

Resurgent Power, 26% owned by Tata Power, has put in a bid of about Rs 4,600 crore for the beleaguered Jaiprakash Power Ventures Ltd (JPVL), about 40% of the projects’ cost. JPVL owns three power plants — 1,320 Mw Nigrie with an attached coal mine, 500 Mw Bina, 400 Mw Vishnuprayag hydro plant — and a transmission line, sources said.

JSW Energy and Edelweiss ARC had earlier submitted their bids, they said. Resurgent and JSW have also submitted Rs 6,000-crore bids each for Jaypee Group’s 1,980 Mw Prayagraj Power Generation. Resurgent has also offered equity infusion of 15% for the project.

The board of State Bank of India (SBI), the lead lender for the Jaypee power plants, is set to meet on Friday and is likely to take a call on the deals ahead of the August 27 deadline as per the Reserve Bank of India (RBI) circular to close the resolution proceedings.

Adani Power has emerged as the highest bidder for KSK Mahanadi at a deal value of about Rs 10,250 crore against a cost of over Rs 19,000 crore. However, lack of consensus among bankers on haircut is causing delay in resolution of many projects, including KSK Mahanadi. While the number of bidders is limited, the number of lenders in most power plants varies between 10 to even 27.

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Tata Power and JSW Energy declined to comment on the bidding processes. Last week, Vedanta Plc CEO (alumina and power) Ajay Dixit told ET the company is looking to take over up to 6 Gw of stressed thermal power plants for both captive and IPP use. However, the company declined further details. Adani Power did not respond to an email sent by ET.

Incase of 600 Mw Jhabua power plant of Avantha Group, a lesser known Noida firm Worlds Window backed by Exim Industries has put in the highest bid and submitted 10% bank guarantee too. However, the company’s demand to have management control over the project even before making the final payment is blocking the deal, sources said.

Edelweiss ARC has offered Rs 3,100 crore for 1200 Mw project of Coastal Energen in Andhra Pradesh. “The bids are typically coming at 50%-60% haircut for lenders. While these are good bargains for the successful bidders, they will require warehousing capability on the new owners’ part till the fuel, PPA and regulatory issues are resolved. In case the projects are being bought for captive use, the issues will be limited,” a sectoral expert said.

ICRA group head (corporate ratings) Sabyasachi Majumdar said, “For new investors, the results would be contingent upon project specific cases like availability of long-term fuel agreement or power tie-up at a reasonable tariff. Prima facie one has to look at new investors’ ability to generate adequate returns but there is not much clarity on legal implications, whether in a cost plus PPA will the discoms claim lower tariffs.”

The controversial RBI circular that came into effect on March 1 mandated banks to identify power projects with even one day’s default as stressed assets and conclude their resolution proceedings within 180 days, which is August 27.

Industry has claimed that 30,000 Mw of private power plants will be pushed to insolvency court if the deadline is not extended. Private power companies have challenged the circular before the Allahabad High Court that has reserved its verdict and is expected to deliver it this week.

The Supreme Court will hear an RBI plea for transferring petitions filed in high courts across the country on August 28. ET had on Thursday reported that top lending institutions, including the country’s largest lender SBI, will hold their board meetings on Thursday and Friday to take approval for resolution plans for a few stressed power projects and to update boards on other such cases.





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