Rs 4,101-cr Adani Power bid for Lanco Amarkantak Power gets NCLT nod

In yet another successful bid through the Insolvency and Bankruptcy Code (IBC), Adani group firm — Adani Power Ltd – is all set to acquire Lanco Amarkantak Power in Chhattisgarh for Rs 4,101 crore.

The Hyderabad bench of NCLT has approved the resolution plan submitted by Adani Power Ltd for Lanco Amarkantak Power. The resolution plan was earlier approved by the committee of creditors by 95.4% vote share.

The resolution plan by Adani Power provides for payment of Rs 4,101 to creditors against their total admitted claims of Rs 15,190 crore. The fair value and liquidation value as submitted in Form-H are stated to be Rs 3,632 crores and Rs.2,241 crores respectively.

Of the total resolution amount of Rs 4,101 crore, assenting financial creditors would receive Rs 4,000 crore against their total admitted claims of Rs 13,957 crore. Dissenting financial creditors will receive Rs 101 crore against their admitted claims of Rs 654 crore. The resolution plan does not provide for any other creditors.

The resolution applicant has argued that the liquidation value of the corporate debtor is not enough to make full payments of the claims of the Financial Creditors, and therefore, the amounts payable to the operational creditors (other than Employees and Workmen and Government and Statutory Authorities) in compliance with Section 30(2)(b) of IBC would be ‘Nil’.

As per the resolution plan, the authorised share capital of Lanco Amarkantak Power will stand increased to Rs 17,400 crores (comprising of 1,740 crore equity shares of Rs.10 each). Adani Power will fund the upfront equity infusion towards subscription of 1,00,000 equity shares of the Corporate Debtor of Rs.10 each, and the Corporate Debtor will issue equity shares for such upfront equity infusion such that the resolution applicant holds 100% of the equity shares in the Corporate Debtor.

All debts, barring CIRP Costs, interim period costs and financial creditors’ debts (to the extent of amount payable to them under the Resolution Plan), will stand converted into equity shares and shall be simultaneously subjected to Capital Reduction. Pre-CIRP issued equity share capital existing as on the effective date will be extinguished.

The insolvency petition against Lanco Amarkantak Power was filed by Axis Bank and the same was admitted by the NCLT through an order dated 05 September 2019. More than a dozen companies including Reliance Industries, Vedanta Ltd and Jindal Power had evinced interest in acquiring company.

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