Banks have zeroed in on Edelweiss as a buyer via the Swiss challenge route
Negotiations between lenders to Adhunik Power and Natural Resources Limited (APNRL) and Edelweiss ARC for a 35% stake sale in the Kolkata-based firm could fructify soon with the Reserve Bank of India (RBI) having eased the rules. While bankers have zeroed in on Edelweiss ARC as a potential buyer via the Swiss challenge method, the deal needs to be ratified at a joint lenders’ forum (JLF).
According to the banker, after the sale banks and Edelweiss will together hold 51% stake in the company and the rest will remain with the promoters. The ARC will also buy around Rs 2,800 crore of the company’s debt through a combination of cash and security receipts. The company’s total debt stood at Rs 3,116 crore at the end of March, 2014.
The latest circular on the threshold for decisions taken at a JLF will help lenders push through a deal, bankers said. A senior banker told FE, 66% of the lenders — by value — had agreed to the stake sale at the JLF; according to the new rules, 60% good enough whereas earlier 75% of lenders needed to agree.
Bankers also said another JLF could be convened soon if any lender objected saying the rules are not applicable retrospectively. To facilitate consensus, the RBI late last week lowered the threshold needed for implementing a corrective action plan (CAP).
In December 2015, lenders had decided to convert a large portion of their loans to equity using RBI’s strategic debt restructuring (SDR) scheme. In November, 2014, the SBI-led consortium had initiated a corrective action plan (CAP)— under the joint lenders’ forum — since the firm had delayed repayments by more than 60 days. Lenders had extended the firm additional short-term loans of Rs 295 crore. Bankers have also been nudging the debt-laden company to sell its 540 MW thermal power plant in Jharkhand and had appointed SBI Capital Markets to look for a buyer.
Adhunik Power has entered into a memorandum of understanding (MoU) with the government of Jharkhand to set up a 1,080 MW coal-based thermal power plant. The company has implemented 540 MW (2×270 MW) power plant at villages Padampur and Srirampur in Seraikela-Kharsawan district in Jharkhand.
In February 2015, Brickwork Ratings had downgraded the company’s long -term and short-term credit facilities. Plant efficiency has been on the lower side with the plant load factor for Phase I expected to be around 65% for FY15 and that of Phase I I expected to be lower, the ratings agency noted in a report. The report added that the company’s negative cash flows company have been managed