REC drags RattanIndia Power to insolvency court
New Delhi-based RattanIndia Power Ltd is in trouble with one of its financial creditors – government-owned REC Ltd — moving insolvency application against it.
The insolvency plea has been filed against RattanIndia Power over dues with regards to REC holding Redeemable Preference Shares of Rs 28.72 crore. The Redeemable Preference Shares were issued, in favour of REC, on 27 December 2019.
RattanIndia Power in an exchange filing has said that it strongly disputes the eligibility and entitlement of REC to seek the initiation of proceedings against it, under the IBC Code and it will accordingly, be pursuing the legal remedies in the matter, available under the law.
RattanIndia Power Limited is one of India’s largest private power generation companies, with installed capacity of 2,700 MW thermal power plants at Amravati and Nashik (1,350 MW at each location) in Maharashtra, India with investments of Rs. 18,615 crores (US $2.5 billion).
The power plants are spread over an area of 2,400 acres. The company counts marquee funds like Goldman Sachs and VardePartners, USA as investors in the business. The group has created world-class power generation assets with its deep focus on execution using best in class equipment and technology.
The company has a total turnover of Rs 3,500 crore with over Rs 330 crore in profit in 2022-23. In the nine-month period in 2023-24, the company posted Rs 2,700 crore in revenue, while the net profit during the period is Rs 66 crore. On a consolidated basis, the company has posted a loss of Rs 1,770 crore in the first nine months of 2023-24. The company had total borrowing of Rs 2,550 crore at the end of 2022-23.
REC is a ‘Maharatna’ company under the administrative control of the Ministry of Power, Government of India, and is registered with RBI as Non-Banking Finance Company (NBFC), Public Financial Institution (PFI) and Infrastructure Financing Company (IFC). REC provides long terms loans and other financing products to State, Centre and Private Companies for creation of infrastructure assets in the country.
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