Some of India’s largest power producers such as Adani Power, JSW Energy, Jindal Power, Vedanta Group, Torrent Power and state-owned NTPC are among 15 companies that have submitted formal expressions of interest (EOIs) for giving a resolution plan to take over the debt-laden Sinnar Thermal Power near Nashik in Maharashtra.
The 1,350 MW power plant, a subsidiary of RattanIndia Power, was initially developed by Indiabulls Power. It is a rare power producer readily available in India where building a green field project is both time-consuming and costly.
Bidders have till later this month to submit an initial resolution plan, which will include a ₹10 crore deposit, people familiar with the matter said.
“The beauty of this project is that it has a huge amount of 1,600 acres, out of which just 110 acres are yet to be acquired, which means any company buying it can double capacity by adding another 1,350 MW. But coal supply was, and still remains, a problem the prospective buyer will have to deal with,” said a person familiar with the plant.
In December 2022, government-owned South Eastern Coalfields cancelled the coal supply contract with Sinnar, citing the non-availability of a power purchase agreement (PPA) and non-commissioning of the majority of units of the plant. Sinnar’s PPA with Maharashtra State Electricity Distribution Company (MSEDCL) was cancelled a few years ago.
“Coal supply is a major challenge. Also, only one unit of 270 MW has achieved commercial operations. The rest of the four units have worked at full load for between three and seven hours only, so a lot of work needs to be done. There could also be some litigation around the land acquired. On the positive side, the company has good equipment from companies like BHEL, Kirloskar and L&T,” said the person cited above.
Sinnar was admitted to insolvency after the bankruptcy appellate court vacated a stay to initiate corporate insolvency against the company, ET had reported in January. The plea for recovery had been filed by Shapoorji Pallonji & Co. for non-payment of dues after constructing a part of the plant.
Power Finance Corp (₹6,553 crore) and its subsidiary REC (₹5,262 crore) are the top two creditors of the company, which have total dues of ₹15,909 crore.
Punjab National Bank (PNB), Axis Bank, Canara Bank, Bank of India and Life Insurance Corp (LIC) are the other creditors.
The plant, based in Sinnar Special Economic Zone (SEZ), is nearly 50 km from the city and 4 km from a national highway.
Resolution professional Rahul Jindal did not reply to an email seeking comment. Mails sent to Adani Power, Jindal Power, Vedanta Group, Torrent Power and NTPC also did not elicit any response. A JSW Energy spokesperson said the company had no comments to offer.
Maharashtra government-owned MSEB Holding Company, the parent of wholly-owned power production, transmission and distribution arms, could also be among the interested bidders, a second person said. MSEB Holding Co officials could not be immediately reached for comment.
The state’s electricity generation company Mahagenco runs the 2,190 MW Koradi power plant near Nagpur. Mahagenco may be interested in the asset as the state may want to keep such a large power asset within its control.
It is the largest state-owned power producer in India with more than 13,000 MW of installed capacity.
Source: Economic Times