12 GW stressed power assets may find buyers in 15 days

By: | Updated: August 29, 2018 4:47 AM

Around eight power projects totalling 12,000 MW and Rs 70,000 crore in outstanding debt are likely to find buyers in the next 15 days after the Allahabad High Court asked the government to expedite resolution of stressed power assets.

Companies such as JSW Energy, Tata Power, Adani and NTPC have publicly stated their intent to participate in sale of these projects.

Around eight power projects totalling 12,000 MW and Rs 70,000 crore in outstanding debt are likely to find buyers in the next 15 days after the Allahabad High Court asked the government to expedite resolution of stressed power assets.

According to the report of the standing committee on power, bids for eight power projects have been floated where firms have shown interest. Analysts believe these projects have strong potential to find buyers in the next 15 days. Another 8,800 MW of projects with Rs 36,300 crore of outstanding loans have been resolved, while 6,100 MW assets with Rs 24,400 crore worth of loans have been referred to the NCLT.

Edelweiss Securities in a report said about 12,000 MW capacity identified under the ‘Samadhan’ scheme makes for potential resolution candidates over the next 15 days. Bids have already been floated for some of the assets with transactions in advanced stages. However, “We expect the haircut to be heavy, upwards of 50% as it is a buyers’ market and lenders are under immense stress to complete the sale before the deadline,” the report said.

Companies such as JSW Energy, Tata Power, Adani and NTPC have publicly stated their intent to participate in sale of these projects.

“JSW Energy with a debt-equity ratio of less than one time has the strongest balance sheet with appetite to absorb stressed projects. Tata Power (through Resurgent Power with a 26% stake) and Adani Power too could exploit this M&A opportunity despite their stretched balance sheets.

However, NTPC, which did not participate in bidding, could be the joker in the pack garnering a lion’s share of the distressed assets referred to the NCLT either as an operator or through O&M services,” the Edelweiss report said. However, the key variable will be remaining stressed assets, which might have to be referred to the NCLT, but not without its own set of challenges.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition