The resolution professional (RP) for Essar Power (Jharkhand) on Friday invited expressions of interest (EoIs) for the company from interested bidders under the corporate insolvency resolution process (CIRP).
In April this year, the New Delhi-based principal bench of the National Company Law Tribunal (NCLT) had admitted a petition filed by ICICI Bank to initiate insolvency proceedings against Essar Power (Jharkhand), which is setting up a 1200-MW coal-fired independent power plant at Chandwa in the Latehar district of Jharkhand. The tribunal had appointed Huzefa Fakhri Sitabkhan as the RP.
Essar Power (Jharkhand) is one of the companies on the second list of accounts which the Reserve Bank of India (RBI) referred for resolution under the Insolvency and Bankruptcy Code (IBC) on August 28, 2017.
Failing to recover `3,033.29 crore in debt from the company, a 100% subsidiary of Essar Power, the private-sector lender dragged it to the insolvency court, which said the ‘advancement of loan and default stand admitted’. According to ICICI Bank, the total amount in default (including interests and other charges) was `3,468.29 crore, as on December 15, 2017.
According to the IBC, upon admission of an insolvency petition, the board of a company is suspended and an interim resolution professional (IRP) is responsible for the daily management of the company. The IRP has to come up with a resolution plan within 180 days, extendable by another 90 days, from the date of admission of the petition. If the account is not resolved, the firm goes into liquidation.
Essar Power (Jharkhand) was incorporated in 2005. Its registered office is in Delhi. The company planned to put up a 2X600 MW coal-based thermal power plant at Tori in Jharkhand in the first phase and another 600 MW plant in the second phase. The company ran into trouble since the cancellation of two allocated coal mines in August 2014. Essar Power Jharkhand’s 2014 annual report notes that the company had signed three power purchase agreements (PPAs) — two with Bihar State Electricity Board and one with Noida Power — aggregating 990 MW. These PPAs were scheduled to be operational between April 2014 and October 2015 but the company said it sought for an extension due to regulatory delays and de-allocation of coal blocks.