Reliance Industries Ltd., Adani Power and the state-run NTPC are among the nearly two-dozen bidders interested in buying the bankrupt SKS Power Generation located in Chhattisgarh, people familiar with the matter told ET.
Others that have expressed interest include Torrent Power, Jindal Power Ltd, the Vedanta Group, DB Power, Sarda Energy & Minerals, Jindal India Thermal and also bad loan aggregators Aditya Birla ARC, Phoenix ARC and Prudent ARC, the people cited above said.
SKS Power Generation is undergoing a corporate insolvency and resolution process (CIRP) since April 2022 and owes two lenders led by Bank of Baroda (BoB) a total of ₹1,890 crore. BoB has the lion’s share of the debt with ₹1,740 crore of secured loans while State Bank of India (SBI) is the other creditor with ₹150 crore of dues.
“The expressions of interest (EOI) have come from different groups indicating the demand for the asset. This is an operational plant with all coal and purchase power agreements in place, a rarity in today’s times. Large industrial groups even with a power sector exposure have shown interest because a captive plant with coal linkages will reduce their power expenses,” said one of the people cited above.
July 28 was the last day for submissions. The cut-off for bidders was set at ₹300 crore net worth and ₹ 1,000 crore of assets under management. Lenders will now scrutinise the EOIs and call for resolution proposals by mid-August.
Lead lender BoB, process advisor BoB Capital Markets and resolution professional Ashish Rathi did not reply to an email seeking comment. Individual bidders could not be immediately reached.
The SKS unit has a capacity to produce 600 MW, out of which 300 MW is presently in working condition. Last month ET reported that NTPC has been tasked with operating and maintaining the plant until lead lender Bank of Baroda (BoB) finds a buyer. The plant has 25 years of fuel agreement with SECL (South Eastern Coalfields Ltd), a
arm with a railway line directly transporting coal to the plant.
It also has power purchase agreements with Rajasthan, Bihar and Chhattisgarh. “All these factors make this an attractive opportunity. Lenders are hoping for a full recovery looking at the interest it has generated. A new plant costs at least ₹ 8 crore per megawatt and this one with all approvals is available for half that price,” said a second person aware of the process.
Some bidders like Jindal Power, a part of the Naveen Jindal Group, and Vedanta Resources have operations close to the plant and hence acquiring this asset makes it a good fit for them.
The plant had stopped production earlier this year after Hong Kong-listed owner Agritrade Resources failed to keep the plant running due to financial difficulties of its own. Agritrade itself had bought the plant in 2019 in a one-time settlement (OTS) with a group of lenders led by SBI.
Interestingly, its previous promoter Atul Gupta, who had run up a debt of ₹4,200 crore before the Agritrade-led OTS, has also expressed interest to take over the company.
Gupta cannot technically be debarred from bidding because his account has been considered settled and he is not a wilful defaulter. But lenders are uneasy with his bid and expect better offers from the rest of the bidders.
