India’s largest private sector power producer Adani Power Ltd, Naveen Jindal’s Jindal Power Ltd, commodities company Vedanta Group, Kolkata-based Orissa Metaliks Pvt Ltd and Varde Partners’ Singapore-based arm VFSI Holdings Pte are among seven companies that have made a formal bid to take over the distressed 1,350 MW Sinnar Thermal Power Sinnar Thermal Power Ltd.
Maharashtra state government-owned MAHAGENCO and public sector NTPC have also submitted a joint bid for the plant, which is based near Nashik, two people familiar with the process said.
The power plant, a subsidiary of RattanIndia Power, was initially developed by Indiabulls Power and was admitted to insolvency in January following a plea by Shapoorji Pallonji & Co for non-payment of dues after constructing a part of the plant.
“Six resolution plans were received earlier this month and are still being evaluated for compliance under the bankruptcy code. The value of these bids is yet to be ascertained as there could be some to and fro between the resolution professional and creditors,” said a person aware of the details. All bidders have submitted an initial resolution plan, including a Rs 10 crore deposit.
Separate emails sent to resolution professional Rahul Jindal and all the seven bidders mentioned above did not elicit any response until press time.
Power Finance Corp (Rs 6,553 crore) and its subsidiary Rural Electrification Corp (Rs 5,262 crore) are the top two creditors of the company, which owes total dues of Rs 15,909 crore. Punjab National Bank (PNB), Axis Bank, Canara Bank, Bank of India and Life Insurance Corp are other creditors to the company. The plant based in Sinnar special economic zone (SEZ) is nearly 50 km from the city and 4 km from a national highway.
It is a rare power producer readily available in India where building a green field project is both time consuming and costly. Though the plant is now defunct, it has 1,600 acres around it, which means any company buying it can double capacity by adding another 1,350 MW.
However, disputes related to the land, supply of coal and a non-existent power purchase agreement (PPA) could dent valuation for creditors, people familiar with the plant said. “There are right of way issues and also no railway linkage to the plant. Building a 150 to 200 km rail line will cost hundreds of crores and will have to be factored in by any prospective buyer,” said a second person aware of the details.
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. State-owned MAHAGENCO along with India’s largest power producer NTPC could be the dark horses in this bid because the Maharashtra government company runs the 2,190 MW Koradi power plant near Nagpur and can use its existing infrastructure to supply coal and run the plant. MAHAGENCO, with more than 13,000 MW of installed capacity, is the largest state government-owned power producer in India.
Coal has been a major challenge for Sinnar after December 2022, when the South Eastern Coalfields Ltd cancelled the coal supply contract citing non availability of PPA and non commissioning of the majority of units of the plant. Sinnar’s PPA with Maharashtra State Electricity Distribution Company (MSEDC) was cancelled a few years ago.
Source: Economic Times