PFC to take RatanIndia plant to bankruptcy court this year

In plant a. Is 8,000 crore debt, while the project’s lead financier PFC has an exposure of approx. 3,000 crores.

“Most of our stressed plants have been resolved. What needs to be resolved is the Sinnar (Nashik) project. We have to take it to NCLT (National Company Law Tribunal). We will take it to NCLT this year. The debt of the project is approx. 6 crore per MW,” said one of the two officials.

Nashik Thermal Power Plant located near Sinnar, 40 km from Nashik city in Maharashtra. The plant has an installed capacity of 1,350MW with coal linkages from subsidiaries of Coal India Limited (CIL).

Another official said that PFC was in talks with the Maharashtra government to handle the stressed project, but the state government was not interested.

Officials noted that Nashik is the last major project where PFC is the lead financier and needs to go bankrupt.

The move comes after PFC’s successful resolution of 600 MW thermal power project of Jhabua Power Limited located in Seoni district of Madhya Pradesh last month.

The project was resolved through the Corporate Insolvency Resolution Process (CIRP) mechanism, in which ownership was transferred to NTPC Ltd., PFC, REC Ltd. and a consortium of other lenders.

Last month, PFC successfully resolved the country’s biggest stressed asset in the power transmission sector – South East UP Power Transmission Company Ltd.

The transaction involved a lump sum advance settlement amount of 3,251 crore with payment of part of the existing cash balance.

The board of PFC on 12 August 2022 approved the creation of Power Asset Management Company (PAMC) to handle stressed power assets.

PAMC will be a 50:50 joint venture between PFC and REC. The REC board on August 5 also approved the proposal for membership of 50% equity in PAMC.

PAMC will be a professional organization with expertise to acquire and operate, maintain and fulfill stressed power assets.

Other projects under CIRP include the 3,600MW KSK Mahanadi Power Project and the 1,920MW Lanco Amarkantak Power Project. Bids have come in for Lanco Amarkantak, but the Committee of Creditors (CoC) is yet to select the winning bid.

For KSK Mahanadi, a consortium of PFC and REC along with PAMC, NTPC is planning to submit a bid jointly as COC has called for fresh bids for the project.

“The process is being restarted, and the time for submission of bids is by October-November. PFC, REC and NTPC will jointly bid. We have put NTPC as a partner in this. We also need technical expertise. We are a financial institution. We will look into the structure, but the operations will have to be done by someone else, and hence NTPC will also take a stake in it,” said the first official above.

“It is a decision to ensure that no project is taken up at low prices,” the official said. PMAC has also bid for the Amarkantak project.

Queries sent to the spokespersons of PFC, RatanIndia, NTPC, REC and Union Ministry of Power remained unanswered till press time.

rituraj.baruah@livemint.com