government owned Power Finance Corporation (PFC) and recThey have jointly submitted a plan, seeking a week’s time to participate in the auction process, said two people familiar with the development.
lender of Spear Amarkantak had passed a proposal to conduct the auction on Friday (25 November) among three resolution applicants – Reliance Industries, Adani Power and the PFC-REC alliance – to identify the highest bidder, as ET reported on November 23. This will be the first time that two of the country’s biggest corporate houses – Reliance and Adani Group – will compete directly against each other for an asset.
PFC and REC together hold 41 per cent of the debt of the insolvent thermal power company.
With 41% of the debt, both solutions can control the process. As per the Insolvency and Bankruptcy Code, for any proposal to be approved, at least 66% of the lenders by the value of the loan must agree. This means that a block with a debt of 34% or more could prevent a resolution.
PFC-REC seeks to acquire the tie-up company. His bid for Lanco Amarkantak may be in line with a resolution passed by state-run lenders to form a power asset management company (PAMC) to buy stressed assets in the power sector. PFC and REC are proposed to hold 50% stake each in PAMC.
PFC had said, “Acquisition of common stressed assets by PAMC, where both REC and PFC have exposure, will have synergistic effect due to pooling of resources.”
Adani Power had offered Rs 2,950 crore for the property, of which Rs 1,800 crore would be paid upfront and the rest staggered over five years, while Reliance had submitted an upfront payment plan of Rs 2,000 crore, as per That was reported by ET.
The PFC-REC duo had offered ₹3,870 crore, but the net present value of the offer is low as the payback is staggered over 10-12 years. The base price for the auction will be ₹2,950 crore – the amount offered by Adani Power, the highest bidder.
Saurabh Kumar Tikmani, resolution professional assisted by KPMG, has accepted claims of ₹14,632 crore from 17 lenders.
future retail and SKS Power are among other stressed assets over which Reliance and the Adani group are likely to compete. Both have submitted expressions of interest for these two companies, though it is unclear whether either firm will submit a bid.
LANCO operates a coal based thermal power project along the Korba-Champa State Highway in Chhattisgarh. It has commissioned the first phase, consisting of two units of 300 MW each, to supply power to Madhya Pradesh, Haryana and the home state.