Led by Punjab National Bank (PNB), the consortium of 18 lenders to Ind-Barath Thermal Power is looking to sell a 100% stake in the project for at least Rs 823 crore. The lenders are seeking a mix of upfront payment and a structured instrument for the sale, a bid document showed. The company’s total debt was Rs 1,021.11 crore on March 31, 2017. The document says PNB Investment Services has been mandated by PNB on behalf of the consortium to identify a strategic investor for the company, which operates a coal-based thermal power project of 300 MW in Thoothukudi district in Tamil Nadu.
“It is proposed to sell 100% equity stake of the company along with management control. The reserve price of the power plant for settlement of lender’s liabilities is Rs 823 crore (on present value basis at 9.50%) and could be a mix of upfront payment, term loan and a structured instrument,” the bid document said. The power plant has been lying idle since May 2016 due to cancellation of short-term power purchase agreements (PPAs), lack of fuel supply agreement and dependence on coal from the market with volatile pricing. The document added that lenders to the project had invoked strategic debt restructuring on June 23, 2017. “It is now proposed to divest stake in the power plant in favour of a new sponsor who can demonstrate the ability to operate the power plant,” it said.
The lenders want the buyer to separately take into consideration infusion of adequate equity for settlement of the creditors, nominal repairs and maintenance for re-commencement of operations at the power plant and adequate margin for working capital facilities for operations. “Presently the power plant does not have a long-term PPA. Hence the new sponsors should have the ability to tie up the entire saleable power,” the document said.