Non-NCLT plans gather pace, bankers hopeful of resolving over half a dozen cases
Bankers hopeful of resolving over half a dozen cases deals for Prayagraj and SKS Chhattisgarh to close by March-end.
Using the window available for lenders of stressed power projects to find a resolution outside the insolvency framework, a clutch of such projects seems to be getting salvaged. Banking sources told FE that a meeting of lenders here on Wednesday discussed at least “7-8 projects” and a final resolution with regard to Jaiprakash Associates-promoted Prayagraj Power Generation Company’s 1,980 MW Bara unit and SKS Chhattisgarh’s 1,200 MW Binjkote plant were expected by the end of the March quarter. The extension of the PPA by the respective state electricity regulators is awaited for both the units soon.
This apart, a PFC-led consortium is set to invite fresh bids for RattanIndia Power’s Amravati (1,350 MW) and Nasik (1,350 MW) assets under the Swiss challenge model based on the one-time-settlement proposal put up by the promoters.
As reported by FE earlier, Resurgent Power Ventures, backed by Tata Power and ICICI Bank, agreed to acquire a little over 75% stake in Prayagraj in November for roughly Rs 6,000 crore, while Hong Kong-listed Agritrade Resources is reportedly buying the SKS asset for Rs 2,170 crore. While the Bara asset deal involves a haircut of 28% for lenders, the haircut in case of the SKS asset is seen at 57%.
A banker said on condition of anonymity: “At least 7-8 power projects that were initially considered for resolution under the (SBI-led) Samadhan scheme were discussed at the meeting today (Wednesday). These projects have already been referred to the NCLT under the central bank’s February12 circular but are yet to be admitted. At today’s (Wednesday’s) meeting, it has been decided that the lead lender in select cases will apply for withdrawal of its application for bankruptcy proceedings of the respective assets provided that all lenders in the consortium are on board and the resolution plan is clear.”
Meanwhile, select power projects of Jaiprakash Power Ventures, which involve a restructuring of the debt with existing promoters, are still awaiting approval from three lenders within the consortium, which is expected by the month-end. Its portfolio of thermal power projects includes Bina (500 MW), Nigeria (2X660 MW) and Bara (3×660 MW).
The Supreme Court is yet to start hearing the batch of petitions against the RBI’s February 12 circular, as per which lenders had to identify projects with even a day’s default and come out with a resolution plan within 180 days from the reference date of March 1, 2018 (that is, by August 27, 2018). The circular had compelled banks to take these firms to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) right away; even some serious attempts by large banks like SBI, which would have helped existing promoters to retain part of their stakes in some stressed but apparently revivable units, were hamstrung by the circular’s stringent time schedule. As the court hasn’t disallowed the resolution window outside NCLT for these assets, many lenders, particularly SBI, is trying to salvage the projects via this route.
It was expected by some analysts that resolution plans for projects with a combined capacity of about 13 gigawatts could have been possible outside the NCLT, but that proved to be optimistic.
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