With Goyal MG Gases failing to make good its bid of Rs 2,300 crore for Jhabua Power, lenders to the stressed company may simply encash the Rs 100-crore guarantee and let the matter be decided at the National Company Law Tribunal (NCLT).
By Mitali Salian
With Goyal MG Gases failing to make good its bid of Rs 2,300 crore for Jhabua Power, lenders to the stressed company may simply encash the Rs 100-crore guarantee and let the matter be decided at the National Company Law Tribunal (NCLT). This was indicated to FE by senior bankers in the know of developments.
Goyal MG has neither paid up nor followed up on the paperwork relating to the source of funds for the proposed payments, bankers said, pointing out the deadline ended in November.
Lenders may also renew buyout talks with the industrial gas manufacturer, which had offered to pay a little over Rs 2,300 crore for Jhabua. Goyal MG had furnished bank guarantees for Rs 100 crore as stipulated by the lenders but did not make any further payments.
A senior banker with exposure to the stressed thermal power plant said on condition of anonymity that at this point, bankers are mulling whether to encash the Rs 100-crore guarantees for the time the lenders have put into this deal and move on, or whether to continue talks with the company. “Calling for fresh bids is still on the table but the process could be a long drawn out one,” he said.
Jhabua Power, a thermal power generation firm based at Seoni district in Madhya Pradesh, is a subsidiary of Avantha Power & Infrastructure.
According to media reports, Delhi-based Goyal MG Gases had offered Rs 2,350 crore in enterprise value for Jhabua Power, outbidding Adani Power, Tata Power-backed Resurgent Power Ventures, Edelweiss Asset Reconstruction (ARC) and Phoenix ARC.
The Supreme Court had in September granted interim relief to stressed power firms, directing lenders to maintain status quo on the Reserve Bank of India’s February 12 circular for banks to resolve these cases within 180 days or refer them for bankruptcy proceedings.
Several petitioners, including GMR Energy, RattanIndia Power, Association of Power Producers (APP), Independent Power Producers Association of India, Sugar Manufacturing Association from Tamil Nadu and a shipbuilding association from Gujarat, had intervened in the matter in different courts seeking relief.
On 27 August, the Allahabad high court denied relief to these power companies. Consequently, lenders identified several stressed assets to be referred to the National Company Law Tribunal.