After industrial gases manufacturer Goyal MG Gases failed to honour its commitment as the highest bidder for Avantha group’s Jhabua Power plant, lenders to the company are planning to re-invite bids for the 600-MW thermal power plant in Madhya Pradesh by February 7.
Sources close to the development told FE that Gautam Thapar-owned Avantha Group, the promoter, is keen to participate in the next round of bidding and are in talks with foreign banks to arrange funds. Since the Jhabua unit is not yet admitted to NCLT, the promoter can submit a restructuring plan for the project and can participate in the auction as well.
The participation of Avantha Group will however depend on the bankers’ valuation of the plant, and at an estimated cost of Rs 3-3.5 crore/MW, it could be valued at Rs 2,100 crore, a source said.
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The company had defaulted on principal and interest payments to lenders led by Axis Bank on a debt of over `4,300 crore. A resolution outside the NLCT is being tried.
In the previous auction in May last year, the Delhi-based Goyal MG Gases had emerged as the highest bidder agreeing to pay `2,350 crore in enterprise value for a controlling stake in Jhabua Power. It had outbid rivals such as Adani Power, Resurgent Power Ventures, Edelweiss Asset Reconstruction and Phoenix ARC. The lenders hold close to 61% of Jhabua Power’s pledged shares, while the remaining stake is with the Avantha group, said the second person cited above.
The plant has long-term power purchase agreements (PPA) with Madhya Pradesh for 71% of its total generation, while 36% is bought by Kerala. The plant has a fuel linkage with Coal India. In 2014, Avantha Power sold its Korba power plant to Adani for ` 4,200 crore.
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.