A consortium of lenders led by Rural Electrification Corporation (REC) and SBI has put on sale a 1,000-megawatt (mw) coal-based thermal power project in Nellore, Andhra Pradesh, operated by Meenakshi Energy (MEPL), according to sources. As of May 2016, Meenakshi Energy’s outstanding debt was over Rs 4,000 crore.
Phase-1 of the project consists of two units with a capacity of 150 mw each. Unit-1 of 150 mw and Unit-2 of 150 mw – aggregating 300 mw – have been commissioned and declared commercially operational. Phase-2 of the project, with a capacity of 700 mw and consisting of two units with a capacity of 350 mw each, is under construction.
According to a public notice, lenders to the project are “running a process to identify investor/s to effect change in ownership and management control of the company” whose second phase “is nearing completion.” An email sent to the Meenakshi group, seeking comment, did not elicit a response till the time of going to press.
In May 2016, India Ratings downgraded the rating on MEPL’s senior bank loans for Phase-1 and Phase-2 and additional term loans for the latter to‘IND BBB’ from ‘IND A-’ and placed it on Rating Watch Evolving (RWE).
The rating agency had said that the downgrade reflected significant slippages in Phase-II of the project schedule, as reflected by the physical progress of 68% in May 2016, while the project’s scheduled commercial operation date was August 31, 2016. “The lenders’ engineer has revised the expected completion date of the project to March 2018,” India Ratings said in its rationale for the downgrade.