CCI approves PSPCL purchase of GVK Power (Goindwal Sahib) Limited
The Competition Commission of India (CCI) has approved the proposed acquisition of 100% shareholding of GVK Power (Goindwal Sahib) Limited by Punjab State Power Corporation Ltd.
The Punjab State Power Corporation Ltd (PSPCL), is a fully owned undertaking of the Government of Punjab. The erstwhile Punjab State Electricity Board (PSEB), was a statutory body formed on 01st February, 1959 under the Electricity Supply Act, 1948. The PSEB was “unbundled” by the Government of Punjab vide Notification No. 1/9/08-EB(PR)196 dated 16th April, 2010 into two separate entities – Punjab State Power Corporation Limited (PSPCL) and Punjab State Transmission Corporation Limited (PSTCL).
The GVK Power (Goindwal Sahib) Limited, was incorporated in December 1997, is a wholly owned subsidiary of GVK Energy Limited which in turn is the subsidiary of GVK Power and Infrastructure Limited. It is engaged in power generation through a 540 MW coal-based thermal power plant.
The proposed combination relates to the resolution plan involving 100% acquisition of the GVK Power (Goindwal Sahib) Limited by PSPCL once it is declared as the successful resolution applicant.
Insolvency petition against GVK Power (Goindwal Sahib) Limited was filed by Axis Bank in October 2022 for default of financial debt of Rs.442 crore. The said sum includes interest and penal interest on term loans and Working Capital facilities.
The power plant owes Rs 6,615 crore to different creditors. Of the total admitted claims of Rs 6,615 crore, Rs 6584 crore is owed to financial creditors.
The Punjab State Power Corporation Limited (PSPCL) emerged as the sole bidder for the corporate debtor in July 2023 with a Rs 1,080-crore bid. The 540 MW (2X270 MW) thermal power plant is located near Goindwal Sahib village, District Tarn Taran in the state of Punjab. This project has a Power Purchase Agreement (PPA) with PSPCL for 25 years.
Punjab Chief Minister Bhagwant Mann has said that with the purchase of this power plant, the Punjab government will save ₹300 crore- ₹500 crore in generation cost as compared to what it was paying to the GVK Group according to the power purchase agreement (PPA) signed during the Shiromani Akali Dal-BJP government’s tenure.
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