15 March 2019: PwC on Thursday invited resolution plans from prospective bidders for Essar Power MP on behalf of its lead lender, ICICI Bank. The power asset owes its consortium of lenders around Rs 5,300 crore.
“The consortium of lenders to Essar Power MP Limited plan to identify a resolution applicant for sale of company by effecting change in ownership and management control of the company owning a 1,200 MW (2×600 MW) coal-based thermal power project using sub-critical technology in the state of Madhya Pradesh,” the consulting firm said in a public notice.
The lending consortium to the project has appointed PwC as advisors for running the bid process and to invite resolution plans from investors or consortia of investors.
In September 2018, ICICI Bank had moved the National Company Law Tribunal (NCLT) seeking initiation of insolvency proceedings against Essar Power MP. However, after the apex court’s order maintaining a status quo on relief to power companies from the February 12 circular of the Reserve Bank of India (RBI), lenders have decided to resolve the issue outside the NCLT.
In February, Rajeev Sharma, chairman and managing director, Power Finance Corporation (PFC), had said that ArcelorMittal had offered to pay lenders Rs 4,800 crore for the 1,200-MW Mahan thermal power project in Madhya Pradesh, surpassing the Essar promoters’ one-time settlement offer of `3,500 crore.
PFC is part of the lenders’ consortium for Essar Power MP. Assets in the power sector had been a cause for concern for banks through much of 2018 as a lack of power purchase agreements and other structural issues had led to many of them defaulting on loan repayment obligations.