Against Resurgent’s offer of Rs 6,086 crore, JSW has agreed to pay about Rs 6,200 crore for the power plant
Upping the ante for the takeover of the stressed 1,980-MW Bara power plant, JSW Energy is said to have revised its offer just a day after Resurgent Power Ventures —backed by Tata Power and ICICI bank — was awarded the Letter of Intent (LoI) for the plant’s acquisition.
Sources said that against Resurgent’s offer of Rs 6,086 crore, JSW has agreed to pay about Rs 6,200 crore for the power plant. Both the companies have accepted to bear the plant’s tax liabilities of about Rs 2,856 crore.
According to sources, JSW was also awarded a similar LoI about three weeks ago, but its previous offer did not include the promise of bearing tax liabilities.
Lenders and the associated companies are said to have scheduled a meeting on Friday to discuss the issue. The Bara power plant is run by Prayagraj Power Generation Company, a unit of Jaiprakash Associates (JAL).
The State Bank of India is the lead lender, and other bankers in the consortium with exposure of more than Rs 500 crore are Punjab National Bank, Indian Overseas Bank, Bank of India, LIC and the Union Bank of India. The total outstanding debt of the plant is about Rs 11,494 crore.
Though the plant has fuel linkage and power purchase agreement tied up for 90% of its capacity, the utilisation levels of the plant have been low due to non-availability of coal on account of lack of working capital facilities.
The plant entered into a 25-year PPA with five distribution utilities of Uttar Pradesh in 2008 for sale of 90% of power generated. It executed a fuel supply agreement in August, 2013 with Northern Coalfields (NCL) for supply of 6.95 MTPA of coal. The project was commissioned 33 months after the scheduled date because of delays in land transfer by Uttar Pradesh, slow equity infusion by the promoter, increase in foreign exchange variation, rate of interest, cost of equipment and labour as per contract and interest during construction due to time overrun.
The development comes after the Allahabad High Court, on Monday, refused a special waiver to independent power producers from the Reserve Bank of India’s (RBI) February 12 circular mandating early detection of non performing assets with an exposure of more than Rs 2,000 crore. The Bara plant is one of the 34 identified stressed power projects with a combined capacity of about 39 gigawatts (GW).