This is the first time that two of the country’s biggest corporate houses will go head-to-head for an asset. A consortium of Power Finance Corp. and REC Ltd, both state-owned, will also participate in the bidding process, the people said.
Claims worth Rs 14,632 crore have been accepted
If RIL’s bid is successful, it will mark the company’s entry into the thermal power sector.
RIL was the highest bidder in the first round of restructuring plan submissions, while Adani Power came first in the second round, the people said. The PFC-REC combine finished third in both rounds.
In the second round, Adani made an offer of Rs 2,950 crore, of which Rs 1,800 crore would be an upfront payment and the remaining Rs 1,150 crore spread over five years, one of the people quoted above said. RIL has submitted an upfront payment plan of Rs 2,000 crore, while the PFC-REC pairing has proposed Rs 3,870 crore spread over 10-12 years, the same person said.
The Rs 2,950 crore offered by the highest bidder Adani Power will be the main price for the November 25 auction, one of the people quoted above said.
At the 51st meeting of the creditors’ committee, which lasted five days, creditors decided to hold an auction to identify the highest bidder, the people cited above said.
RIL, Adani and PFC did not respond to ET’s queries.
IBC Rules for Debenture Holders
PFC and REC together hold 41% of the company’s debt. Effectively they would play the role of seller and buyer.
The Insolvency and Bankruptcy Code (IBC) guidelines do not prevent debt holders from bidding for a company that is in corporate insolvency.
Saurabh Kumar Tikmani, the KPMG-backed restructuring professional (RP), has admitted claims of Rs 14,632 crore from 17 creditors.
Future Retail and SKS Power are among the other distressed assets that RIL and Adani are likely to compete for. Both have submitted expressions of interest to these two companies, although it is unclear whether either will submit a firm offer.
Vedanta’s proposal was rejected
Lanco Amarkantak’s RP restarted the sale process of the power company in January, soon after lenders rejected a binding offer from Vedanta Ltd. The Anil Agarwal-promoted company has offered nearly Rs 3,000 crore to lenders, including a Rs 2,150 crore bond due in seven years, a partial payment from cash on Lanco Amarkantak’s balance sheet and a small upfront payment.
Lanco operates a coal-based thermal power project on the Korba-Champa state highway in Chhattisgarh. It has commissioned the first phase, comprising two units of 300 megawatt (MW) each, which supply electricity to Madhya Pradesh, Haryana and the home state.
The second phase, including two more units of 660 MW each, is under construction.
Construction work on the third phase, which includes two units of 660 MW, has not yet started, according to the company’s website.