9 August 2019: Power Finance Corporation (PFC) on Thursday sought bids for consortium loans worth Rs 8,215 crore to RattanIndia Power’s (RIPL) 1,350-megawatt (MW) Amravati Thermal Power Project Phase I, as a plan to settle the loans with the promoter likely fell through.
The project’s liabilities include term loans of Rs 6,940 crore, working-capital loans worth Rs 815.5 crore and non-fund-based limits to the tune of Rs 459 crore, as on September 30. SBI Capital Markets (SBICaps) is handling the sale process on behalf of lenders.
“Lenders have proposed to offer and assign their existing security, including rights on Project assets and pledge rights on shares of RIPL, as part of the assignment of outstanding debt,” PFC said in a bid document.
In May 2019, PFC had said that it was nearing a resolution for the stressed Maharashtra project. For Rattan India Amravati, PFC had received a revised one-time settlement (OTS) proposal and the company was carrying out discussions and negotiation with the borrower. Rajeev Sharma, chairman and managing director, PFC, had told reporters after the financier’s Q4FY19 results, “In Rattan India Amravati, we are expecting almost 50% recovery. We understand that this will be a faster and better route outside NCLT (National Company Law Tribunal).”
The Amravati project was selected after a Case-I competitive bidding under Section 63 of the Electricity Act, 2003 for supply of 1,200 MW (net) power to Maharashtra State Electricity Distribution Company (MSEDCL). It achieved commercial operation date (COD) on March 13, 2015.
The thermal power project is one of the large non-performing assets (NPAs) in the power sector which are awaiting resolution. In September 2018, the Supreme Court halted insolvency proceedings under the Reserve Bank of India’s (RBI) February 12, 2018 circular against seven coal-based stressed power projects with generation capacities of 10,190 MW, one of which was RattanIndia’s Amravati project.
According to the bid document, the total completion cost of the project is Rs 8,556 crore and it was funded in a debt:equity ratio of around 74:26. The units have already been commissioned and have been in operation for more than three years. Statutory clearances and approvals required for operation of the project — water supply arrangement, civil aviation clearance for chimney height and consent to operate from Maharashtra Pollution Control Board among them — are in place. “RIPL has firm PPA (power purchase agreement) for sale of 1,200 MW net from the project to MSEDCL (Maharashtra State Electricity Distribution Company) and the same would continue post the strategic sale,” PFC said in the project description, adding, “The fuel for the plant, that is, coal is available from mines in Chhattisgarh and is being supplied by SECL (South Eastern Coal Fields).”