Mumbai, October 25 (IANS). After Adani Power proposed a bid of Rs 12,500 crore for the acquisition of KSK Mahanadi power plant in Chhattisgarh, other bidders have also offered a higher price and according to reports, their final bid could be much higher.
Following the implementation of the challenge mechanism by the Committee of Creditors (CoC), lenders to distressed power plants are now expected to recover completely from the NPA, which is rarely seen in the Insolvency and Bankruptcy Code (IBC) process.
Sources close to the IBC framework have attributed the revival of interest in KSK Mahanadi to Adani Power’s initial high bid of Rs 12,500 crore, which was 62 per cent or Rs 4,800 crore higher than the second bidder.
Sources said six of the 10 original bidders, including NTPC, have now revised their offers to align their bids with Adani’s, indicating stronger competition and increasing the value of the asset. Industry insiders said this shows that IBC has the potential to fetch higher prices.
Apart from Adani’s competing bid, KSK Mahanadi has cash reserves of Rs 10,000 crore. Also, he is going to get Rs 4,000 crore in return for the sale of the product. Thus, the lenders will recover a total of Rs 27,000 crore which is 92 percent of the total loan.
KSK Mahanadi has an installed capacity of 1,800 MW. There was an outstanding loan of Rs 29,330 crore on this project. The company was brought into the IBC process in 2019.
Adani Power’s bid of Rs 12,500 crore was the highest offer among competing entities, which included majors like JSW Energy, Jindal Power Vedanta, NTPC and Coal India. Other bids were earlier priced between Rs 6,500 crore and Rs 7,700 crore, much lower than Adani’s offer.
Even after the recent acquisition of Lanco Amarkantak (1,920 MW) and Coastal Energen (1,200 MW) through similar IBC processes and despite Adani’s impressive bid, the CoC chose the challenge mechanism to increase competition. This resulted in higher bids being received from other bidders also.
Adani Power’s bid for KSK Mahanadi marks a turning point for IBC, where corporate influence and potential for maximum value realization come together. While some may criticize it as centralization of power, others are of the opinion that it is a necessary development in the Indian insolvency scenario.
–IANS
AKJ/
