CHENNAI: The Committee of Creditors of Chennai-based power generation firm Coastal Energen has approved the resolution plan submitted by the Adani Power-led consortium, the latter informed the exchanges on Sunday.
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In this regard, the consortium of APL (Adani Power Ltd) has received a Letter of Intent (LOI) from the Resolution Professional (RP) on 23 December 2023. The implementation of the resolution plan is subject to the terms of the LOI and requisite approvals from the NCLT and/or any other regulatory authority/courts/tribunal (as the case may be) under applicable laws,” Adani Power said in a regulatory filing.
Coastal Energen Pvt Ltd, the power generating flagship company of the Coal and Oil Group, was to set up a 1200 MW coal-fired thermal power plant in the district of Tuticorin in Tamil Nadu. A consortium of banks led by the State Bank of India had provided loans to Coastal Energen to set up the thermal power project in Thoothukudi. However, due to delays and cost overruns, the project cost shot up from R4,297 crore to R 7,870 crore. This led to financial difficulties for the company, and it was unable to service its obligations to the lenders.
In February 2022, the Chennai Bench of the National Company Law Tribunal (NCLT), admitted the insolvency application filed by SBI against Coastal Energen. Creditors of the Chennai-based company had submitted claims of over R12,000 crore. Though the details of the resolution plan submitted by Adani Power is not known publicly, it has been reported that the consortium has offered around R3,500 crore to the creditors of the company.
Vedanta, Torrent Power, Jindal Power, and Dickey Alternative Investment Fund were also in the race to acquire the company. In October this year, promoters of the company -- Mutiara & Precious Energy Holdings – had offered to pay a total of R5,847 crore, including 15% ownership of the company, to its lenders to settle its debts.