Vedanta and a Hyderabad-based investment company have bid for Lanco Amarkantak Power, which went into bankruptcy last year, according to people aware of the matter.
The bidders are said to have made offers raging from Rs 2,000 crore to Rs 3,000 crore each to take over the stressed power plant located in Chhattisgarh, the people said. The Hyderabad company could not be identified.
The bids are being evaluated for legal compliance before negotiations are opened up, the people said.
“We don’t comment on speculation,” a Vedanta spokesperson said in response to ET’s queries.
A group of 17 lenders had advanced about Rs 14,000 crore to the power company. Five of them – Axis Bank, Power Finance Corporation, Edelweiss ARC, LIC and IDBI Bank – accounted for more than half of those loans.
Lanco Amarkantak Power, which was incorporated in February 2001, has coal-fired thermal power units on 1,337 acres of land near Pathadi village on the Korba-Champa state highway in Chhattisgarh.
The project has two units of 300 MW each that currently supply electricity to Madhya Pradesh, Haryana and Chhattisgarh. The second phase of two units of 660 MW each has been delayed beyond the targeted commissioning in 2016-17. Work on the third phase to add two more units of 660 MW each has not started.
The Lanco Group initially resisted bankruptcy proceedings initiated by Axis Bank at the National Company Law Tribunal and argued that the proceedings violated Reserve Bank of India guidelines.
The NCLT ruled against Lanco and ordered the commencement of the insolvency process and appointment of KPMG’s Saurabh Tikmani as the resolution professional of the company on September 5 last year.
Bankrupt companies have found it hard to attract bidders in the aftermath of the pandemic. Proceedings of Videocon, Reliance Communications, Aircel, Bhushan Power and Steel, KSK Mahanadi Power and Essar Projects are running late or have stumbled upon problems such as bidders backing out and regulators and courts intervening in the process.
With governments across the globe backing renewable energy, valuations of thermal power plants have been adversely impacted. This explains the low bids for Lanco Amarkantak Power, said a banker familiar with the bidding process for the company.
Source: Economic Times