NEW DELHI: The Hyderabad bench of the National Company Law Tribunal (NCLT) on Thursday approved the Rs 16,084 crore resolution plan submitted by JSW Energy Limited for KSK Mahanadi Power Company Limited, a Chhattisgarh-based thermal power company.
"When tested on the touchstone of the (earlier) rulings, and considering the facts of the case, we are of the view that the Resolution Plan satisfies the requirements of Section 30 (2) of IBC and Regulations 37, 38 & 39 of CIRP Regulations. We also find that the Resolution Applicant is eligible to submit the Resolution Plan under Section 29A of IBC," the NCLT bench –with Sanjay Puri, Member (Technical) and Rajeev Bhardwaj, Member (Judicial) – stated while delivering their order.
The President of NCLT Justice (Retd) Ramalingam Sudhakar said he is taking strenuous steps to approve the pending Resolution Plan in all the benches of NCLT in an accelerated manner.
The present Resolution Plan has been approved by the NCLT Hyderabad Bench within a record date of 15 days from the date of its first hearing. Till date a total of 1220 Resolution Plans have been approved by all the benches of NCLT. From 01.04.2024 to till date a total of 220 Resolution Plans have been approved by all the benches of NCLT, he noted.
The Power Finance Corporation Limited had initiated the corporate insolvency resolution process against KSK Mahanadi Power Company Limited in October 2019.
The Resolution Professional (RP) – Sumit Binani – received Rs 32,335 crore claims from different creditors including 19 banks and financial institutions.
In response to the Expression of Interest issued by the Resolution Professional, ten Prospective Resolution Applicants (PRA) submitted the Resolution Plan, including NTPC Limited, Vedanta Ltd. and Adani Power Limited.
In order to maximise the value of the assets, a Swiss challenge process was adopted and JSW Energy Limited emerged as the highest bidder. The Resolution plan was approved with 100% voting from the Committee of Creditors (CoC).
The resolution amount of Rs 16,084 crore is about 50% of the amount claimed and 235% of the liquidation value -- Rs 6,848 crore -- of the company.
As per the resolution plan, an upfront cash payment of Rs 15,985 crore will be paid to the financial creditors, and an upfront payment of Rs 99 crore to operational creditors.
Of the Rs 16,084 crore, JSW Energy will raise Rs 13,000 crore in the form of debt and Rs 3,084.08 crore in the form of quasi-equity.
KSK Mahanadi Power Company Limited (KMPCL) owns a 3,600 MW thermal power plant, utilising domestic coal and located in the state of Chhattisgarh.
Presently, 1,800 MW (600 MW x 3 units) is operational which is 95% tied-up under long & medium-term power purchase agreements. An additional 1,800 MW (600 MW x 3 units) is under-construction out of which one unit (600 MW) is 40% completed and balance of plant is in place for the remaining 1,200 MW. The plant has a firm arrangement for water and coal transportation for the entire 3,600 MW.
The company’s total locked-in thermal generation capacity stands at 7.5 GW and total locked-in generation capacity stands at 28.2 GW. This positions JSW Energy to achieve its target of 20 GW significantly before 2030 and is committed to a net zero target by 2050.