Ex-promoter offers Rs 5,847 cr to regain control of Coastal Energen
The existing owners of Coastal Energen, Mutiara & Precious Energy Holdings, have offered to pay a total of Rs 5,847 crore, including 15% ownership of the company, to its lenders to settle its debts. This offer is currently being considered by the lenders.
The offer comes amid news that Adani Power has emerged as the successful bidder to buy Coastal Energen. However, if the lenders accept the existing owners’ offer, Coastal Energen will remain under their control.
Of the total settlement offered, Rs 2,327 crore has already been paid to the State Bank of India (SBI) Consortium. The remaining Rs 3,520 crore would be paid to the other lenders.
The Rs 5,847 crore settlement offer represents a recovery of 82% for the lenders, which is higher than the Rs 3,440 crore offer made by Dickey-Adani Power. This offer is also among the highest in the country for stressed power producers.
The SBI-led consortium had provided loans to Coastal Energen to establish a 1,200 MW thermal power project in Thoothukudi, Tamil Nadu. However, due to delays and cost overruns, the project cost shot up from Rs 4,297 crore to Rs 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 National Company Law Tribunal, Chennai, admitted the application filed by SBI against Coastal Energen to initiate the Corporate Insolvency Resolution Process (CIRP).
The existing owners of the company are confident that the SBI-led consortium will accept their offer, considering that it represents a very attractive recovery for the lenders. They also point out that they have ensured that Coastal Energen is well maintained, even in the face of financial constraints.
Coastal Energen is one of 34 stressed independent power producers (IPPs) in India that are nearing resolution.
Apart from Adani Power, Vedanta, Torrent Power, Jindal Power, and Dickey Alternative Investment Fund have also expressed interest in acquiring the company.
Also Read: NCLT approves Rs 74.81-crore resolution plan for Ujaas Energy
