SC allows Adani Power, DAIT to operate Coastal Energen plant
The Supreme Court has allowed the consortium of Dickey Alternate Investment Trust (DAIT) and Adani Power to operate a power plant of Chennai-based power generation company Coastal Energen. The apex court on Thursday restored the situation before the National Company Law Appellate Tribunal (NCLAT) on 6 September 2024.
The NCLAT had stayed the NCLT order that approved the resolution plan submitted by Adani Power consortium. The Successful Resolution Applicant (SRA) – the consortium of Dickey Alternative Investment Trust and Adani Power Ltd – had challenged the NCLAT’s order dated September 6, which effectively put on hold the Rs 3,500-crore resolution plan put forth by them for the revival of Coastal Energen Private Limited.
However, the Supreme Court clarified that its order will be subject to the condition that the consortium will not dismantle the plant, create any third-party rights, alienate the plant or create any financial obligations except in the ordinary course of business.
The Court has further directed the parties not to seek any adjournment of the NCLAT hearing scheduled on September 18. The Court also clarified that the order should not be construed as any observation on the merits of the appeal pending before the NCLAT.
On 30 August 2024, the Chennai bench of the National Company Law Tribunal (NCLT) had approved a resolution submitted by the consortium for a sum of Rs 3,500 crore.
The NCLT order was challenged by ex-promoter of Coastal Energen AR Buhari, who has alleged ‘glaring irregularities’ in the way the resolution plan was approved by the lenders. The promoter of the power company has contended that Adani Power piggy-backed Dickey Alternate Investment Trust to get a back-door entry into the bidding process after Adani’s expression of interest (EoI) was rejected by the resolution professional (RP) for delayed submission.
As per the resolution plan, financial creditors will receive Rs 3,335 crore, 28.52% of their total claim of 11,678 crore. Operational creditors will receive a sum of Rs 4.64 crore. A sum of Rs 109 crore has been set aside as CIRP cost.
The resolution plan was earlier approved by the committee of creditors by 100% vote share.
The plan proposes incorporation or use of an existing Company as a Special Purpose Vehicle (SPV) — Moxie Power Generation Limited– for the implementation of the resolution plan. The consortium of DAIT and Adani Power has stated that they have commenced the process of incorporating the SPV in the form of a company under the Companies Act, 2013 in the state of Tamil Nadu with registered office at Chennai. The SPV has been incorporated on 30 January 2024 and with its registered office at Ramcon Fortuna Towers 4th, Kodambakkam High Road, Nungambakkam High Road, Chennai, Chennai- 600034.
Also Read: Adani Power consortium acquires Coastal Energen for Rs 3,335 crore
