30 May 2019: All 17 lenders to GMR Chhattisgarh Energy have approved Adani Power’s bid for the 1,370 megawatt (MW) pulverised coal-fired plant in Raipur, a senior official at the Power Finance Corporation (PFC) told reporters on Wednesday. He said KSK Mahanadi, another stressed project for which Adani had earlier put in a bid, will be heading back to the National Company Law Tribunal (NCLT) for a fresh insolvency procedure.
Rajeev Sharma, chairman and managing director of PFC, said his company is expecting a recovery of close to 50% from GMR Chhattisgarh, against which it has already provided 51%. “I am confident that within the next one month or maximum two months, we should be able to recover 50% from this project,” he said.
PFC’s exposure to GMR Chhattisgarh is about Rs 1,000 crore. The power project’s total outstanding debt stood at Rs 8,800 crore at the end of FY18, according to its parent firm GMR Infrastructure’s annual report for the year.
As for KSK Mahanadi, lenders have decided to approach the insolvency tribunal a second time after Adani Power withdrew its bid for the project. Earlier, the project had been referred to the NCLT when lenders were unable to resolve it by other means over the six-month period between March 1, 2018 and August 27, 2018, as stipulated by the Reserve Bank of India’s (RBI) February 12, 2018 circular.
On April 2, 2019, the Supreme Court struck down the February 12 circular as ultra vires. As a result, lenders withdrew insolvency petitions against three power projects, including KSK Mahanadi, which owes its lenders more than Rs 16,000 crore.
The other two projects — Rattan India Amravati and Rattan India Nasik — are close to resolution, Sharma observed. For Rattan India Nasik, the Maharashtra Electricity Regulatory Commission has given its approval for operationalising a 507-MW power purchase agreement (PPA) with Maharashtra discom.
The resolution plan will be finalised after the operationalisation of the PPA. For Rattan India Amravati, the PFC has received a revised one-time settlement proposal and the company is in discussion and negotiating with the borrower. “In Rattan India Amravati, we are expecting almost 50% recovery. We understand that this will be a faster and better route outside the NCLT,” Sharma said.
Another stressed asset, GVK Ratle, where the PFC had an exposure of `800 crore, has been upgraded to the standard category from the non-performing asset (NPA) category in the quarter ended March 2019. The borrower has been servicing its dues for the past one year and the PFC has reversed provisions worth Rs 650 crore in this account.
PFC expects 100% recovery of the principal amount in the accounts of Dans Energy, Shiga Energy and Essar Transmission, to which it has an aggregate exposure of Rs 1,400 crore and against which it holds provisions to the tune of 11%.