JSW Energy plans to take its battle with the Tatas for control of Prayagraj Power Generation to the NCLT once the creditors begins bankruptcy proceedings against the stressed power project.
JSW Energy chief operation officer Sharad Mahendra said that the company remained interested in projects having proper fuel linkage and power purchase agreements (PPAs) and Prayagraj Power falls in that category. The 1980 MW super-critical coal-based power project in Uttar Pradesh has all approvals and clearances in place along with long-term PPAs and fuel-supply agreement.
“If we are given the option, we would be interested in bidding afresh for Prayagraj once the asset lands in the National Company Law Tribunal (NCLT) for resolution under the terms of the new bankruptcy code,” Mahendra said. JSW Energy and Tata Power/ICICI Venture-promoted Resurgent Power Venture has been involved intense bidding battle to take control of Prayagraj, a Jaypee Group company.
JSW’s Rs 5,600-crore bid in the first round was earlier declared as the highest and was issued letter of intent but Resurgent Power, in which Tata Power is a shareholder, snatched the deal by offering Rs 6,000 crore. JSW bettered this later to about Rs 6,200 crore, but the lenders did not consider it.
Under the SC’s directions, Prayagraj now faces action under the Insolvency and Bankruptcy Code (IBC), if the lenders are unable to resolve the case by November 14, the next date for hearing the matter pertaining to stressed power assets by the apex court.
“NCLT is not the end of the road for our interest in the power project. If creditors decide, they can take out an asset from NCLT with a 90 per cent majority,” Mahendra said. JSW’s interest in the project could be seen in its second bid for the power project. The company not only offered upfront payment of Rs 6,200 crore but sources said it also increased the equity issuance to lenders to 15 per cent from 13.9 per cent offered earlier. It also offered to take care of the tax liabilities in addition to the upfront payment.
Singapore-based Resurgent Power, in which Tata Power holds is 26 per cent, has also been aggressive about the Prayagraj Power as the project offers immense value to the entity.
Lenders led by the SBI are trying to sell the asset outside the purview of insolvency proceedings under NCLT, but sources said that it is unlikely to strike a deal before the cut-off date. Lenders had acquired a majority stake in Prayagraj by converting debt of Rs 11,000 crore into equity. The promoter company Jaiprakash Associates currently owns 11 per cent stake. Prayagraj forms part of 34 stressed power projects with a combined capacity of 40,000 MW identified by the finance ministry for resolution. Projects like GMR Chhattisgarh Energy, KSK Mahanadi, Essar Mahan, RKM Powergen, RattanIndia Amravati and Nashik are other projects awaiting lenders’ nod to complete resolution otherwise they will land in NCLT.