Mumbai: Adani Power has emerged as the top bidder for KSK Mahanadi Power’s 1,800-megawatt thermal plant, offering Rs.27,000 crore amid the plant’s insolvency proceedings. This bid promises a significant 92% recovery for the lenders involved.
By Thursday evening, banks had received a total of ten financial bids for the distressed power company. Notable bidders include Capri Global Holdings, Coal India, NTPC, Vedanta, JSW Energy, Jindal Steel & Power, iLab India Special Fund, Rashmi Metaliks, and Sherisha Technologies.
Adani Power’s bid comprises Rs.12,500 crore in immediate cash, Rs.9,000 crore from accumulated cash in the company’s operational units, and an estimated Rs.5,500 crore in receivables.
Capri Global Holdings placed the second highest bid, proposing Rs.25,000 crore, including cash and receivables. NTPC, the third highest bidder, offered Rs.22,200 crore, which includes Rs.7,700 crore in upfront payment and Rs.14,500 crore from cash and receivables.
The resolution professional for KSK Mahanadi Power, Sumit Binani, has acknowledged claims amounting to Rs.29,330 crore from financial creditors. Adani’s bid, which translates to Rs.7 crore per megawatt, is the highest bid ever for a distressed thermal power asset.
During a recent lenders’ meeting, Binani presented the ten bids, prompting banks to seek better offers and consider an auction among the bidders. There is a strong possibility that lenders could recover nearly their entire dues after this auction.
Adani Group had previously shown interest in acquiring KSK Mahanadi before its insolvency in October 2019. In late 2018, they proposed Rs.10,300 crore but withdrew in early 2019 due to tariff revisions by the Uttar Pradesh government. The insolvency process, which began five years ago, has faced delays due to various litigations, and a dozen lenders, holding approximately Rs.16,165 crore in verified claims, have sold their debts to asset reconstruction companies (ARCs).
Currently, six ARCs control 54.4% of the verified claims. Among the lenders, State Bank of India, Life Insurance Corporation, and others have sold their loans, with Aditya Birla ARC holding the largest share at 33.38%, followed by ASREC (India) at 12%.
The NCLT had stayed the sale process in June 2022, following a request to consolidate the resolution with two related companies, KSK Water Infrastructure and Raigarh Champa Rail. The consolidation proposal was rejected, and subsequent appeals to the National Company Law Appellate Tribunal also resulted in a stay. Bids were invited after the stay was lifted.
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