Lenders of Coastal Energen approves Adani Power resolution plan
The Committee of Creditors has on December 23rd approved the resolution plan submitted by a consortium led by Adani Power for Chennai-based Coastal Energen, the former said in an exchange filing. The Rs 3,500 crore resolution plan will now be put before the NCLT for its approval.
“…the consortium of APL has received a Letter of Intent (LOI) from the Resolution Professional (RP) on December 23, 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 had taken loans from a consortium of banks led by State Bank of India for setting up of a 1200 MW coal-fired thermal power plant in Tuticorin, Tamil Nadu. However, delays choked progress, and costs surged from Rs 4,297 crore to a staggering Rs 7,870 crore. Unable to stay afloat, Coastal Energen found itself dragged to the National Company Law Tribunal in February 2022.
Apart from Adani Power, Vedanta Ltd, Torrent Power, Jindal Power, and Dickey Alternative Investment Fund had also submitted expression of Interest in acquiring the assets of the company. Even the original promoters, Mutiara & Precious Energy Holdings, made a last-ditch effort, offering Rs 5,847 crore, including a 15% stake in the company, to appease their creditors.
But in the end, it was Adani Power who secured the coveted Letter of Intent from the Resolution Professional. Their bid, reportedly around Rs 3,500 crore, may have been lower than the promoter’s offer, but it resonated with the Committee of Creditors. Perhaps it was Adani’s proven track record, their financial muscle, or simply their vision for the future of Coastal Energen.
The lenders of the corporate debtor have submitted claims in excess of Rs 12,200 crore against the company.
Also See: Ex-promoter offers Rs 5,847 cr to regain control of Coastal Energen
