NEW DELHI: Tata power and ICICI Ventures-backed Resurgent Power on Wednesday said that it has acquired debt-ridden Jaiprakash Associates’ 1,980 MW Bara (Prayagraj) Thermal Power Plant, making the project the first among stressed power assets to be resolved by lenders outside of the insolvency courts.
According to an official statement from Resurgent Power, lenders to Prayagraj Power Generation Company Limited (PPGCL) have issued a Letter of Intent to Resurgent Power Ventures Pte Ltd for the acquisition of 75.01 per cent stake in PPGCL, a 3X660MW coal-based power project based in Uttar Pradesh.
Singapore-based Resurgent Power was set up in 2016 to invest in power projects. Tata Power owns 26 per cent of Resurgent, while the rest 74 per cent is held by ICICI Venture. Estimated at Rs 6,000 crore, the deal is expected to see the lenders' consortium led by SBI take a 50 per cent haircut as the power plant’s debt stands at Rs 12,000 crore. The project was one of several power plants identified for expedited resolution under the Samadhan scheme.
“After our due diligence, we found that Prayagraj Power fits in our overall scheme of growth. It has all approvals and clearances in place along with long-term PPA and fuel supply agreement. It will be a value-adding asset in Resurgent Power’s portfolio,” Praveer Sinha, CEO & MD, Tata Power, said.
The Prayagraj project was set up by Jaypee Group and fully commissioned in May 2017 at a cost of Rs 15,537 crore comprising an equity contribution of Rs 4,543.50 crore and debt of Rs10,993.50 crore. The lenders offered 89.47 per cent stake in the company at a face value of Rs 10 each. SBI Capital Trustee controlled 89.5 per cent stake in Prayagraj Power, according to a recent ICRA report.