Led by Punjab National Bank (PNB), a consortium of 18 lenders to Ind-Barath Thermal Power have re-invited expressions of interest (EoIs) for a 100% stake in the project, according to a bid document, with the reserve price raised marginally to Rs 827.95 crore from Rs 823 crore earlier. FE had reported on March 2 that lenders were seeking a strategic investor who would also assume management control of the 300-megawatt (MW) coal-based thermal power project in the Thoothukudi district of Tamil Nadu.
Lenders are seeking a mix of upfront payment, term loan and a structured instrument for the sale, according to the latest bid document. 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. “Transaction is proposed to be completed in not more than three months. The reserve price for the power plant is Rs 827.95 crore (on present value basis at 9.50% considering the above timeline for closure of the transaction) for settlement of lender’s liabilities,” 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 earlier bid document stated 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 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.