Tata Power on Wednesday said Renascent Power Ventures, a wholly owned subsidiary of Resurgent Power Ventures, has signed a share purchase agreement with a consortium of lenders led by State Bank of India (SBI) to acquire a 75.01% stake in Prayagraj Power Generation.
Resurgent Power Ventures is backed by Tata Power and ICICI Bank.
The financial details of the transaction were not disclosed.
Prayagraj Power, a unit of Jaiprakash Associates, runs the stressed 1,980-MW Bara power plant.
Resurgent and JSW Energy had been counter-bidding each other to take over the plant over the last few months. As FE reported in August, JSW Energy had agreed to pay about Rs 6,200 crore for the power plant, beating Resurgent’s earlier offer of Rs 6,086 crore. Both the firms had accepted to bear the plant’s tax liabilities of about Rs 2,856 crore.
This would be the second resolution found for stressed power assets after the Supreme Court on September 11 asked the RBI, banks and others to desist from invoking insolvency proceedings against corporate defaulters as per the banking regulator’s February 12 mandate till its orders. According to other sources, SKS Power’s 1,200 MW Binjkote units have reached a resolution outside the NCLT, after the SC relief.
SBI is the lead lender and other bankers in the consortium with exposure of more than `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 `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 the sale of 90% of power generated. It executed a fuel supply agreement in August 2013 with Northern Coalfields 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 UP, 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.