Tata and Adani will go head-to-head for a third time in the hard-fought contest for South East UP Power Transmission Company after lenders called for another round of bids since the previous two rounds were inconclusive, people aware of the matter told ET.
had outbid Adani offering 100% recovery of loans of ₹3,700 crore to the lenders in the previous round. Adani’s bid was only marginally lower at the time. Tata’s bid was set aside because it was conditional. Tata and Adani had first submitted bids in August and then on October 30. The final round of bids is now due at the end of January.
Tata has requested lenders to consider a Swiss challenge on grounds that it was the highest bidder in the previous round and should get a chance to match the best bid. However, that request has been turned down.
Both companies have informed lenders that they will bid again.
Although Vedanta group company Sterlite Power, Power Grid Corporation of India and REC PDCL were among other companies that also participated in the previous bidding round, they are likely to stay away this time, according to sources.
Tata Power declined to comment. Adani and South East UP Power Transmission company’s resolution professional, Shailesh Verma did not respond to queries.
Verma had issued an invitation to submit an expression of interest (EoI) to buy the company to prospective bidders on February 18, 2021.
As many as eight parties submitted expressions of interest.
Torrent Power, Megha Engineering and a sovereign wealth fund had also submitted expressions of interest in March. But not all finally bid for the transmission utility.
South East UP Power Transmission Company was admitted for insolvency and bankruptcy code (IBC) proceedings at National Company Law Tribunal (NCLT) after it defaulted on loans to a group of lenders that includes Rural Electrification Corporation, Power Finance Corporation, Bank of India and Axis Bank.
The company went into financial trouble after its owner Grupo Isolux Corsan filed for bankruptcy in Spain.
The Madrid-based Isolux Corsan had won a 35-year concession to build and operate a power transmission network in Uttar Pradesh spanning 1,600 km in July 2011.
A paucity of investment opportunities in the transmission sector explains the intensity of the contest for the company, experts said. Private players have only a 5% market share in the power transmission space.