NCLT approves JSW Energy’s Rs 16,000cr resolution plan for KSK Mahanadi Power
The Hyderabad bench of the National Company Law Tribunal (NCLT) has officially approved the Rs 16,084-crore resolution plan proposed by JSW Energy Limited for the acquisition of KSK Mahanadi Power Company Limited, a Chhattisgarh-based thermal power producer. This significant development marks a crucial step in resolving the financial distress faced by the company.
The corporate insolvency resolution process (CIRP) for KSK Mahanadi Power Company Limited commenced in October 2019, following an application filed by Power Finance Corporation Ltd. The Resolution Professional (RP), Sumit Binani, received claims amounting to Rs 32,335 crore from various creditors, including 19 banks and financial institutions, underlining the magnitude of the company’s financial liabilities.
To identify suitable investors, the RP issued an Expression of Interest (EoI), attracting interest from 10 Prospective Resolution Applicants (PRA). Among these were industry giants such as NTPC Ltd, Vedanta Ltd, and Adani Power Limited. In an effort to maximize asset value, a Swiss challenge auction process was implemented, leading to JSW Energy Limited emerging as the highest bidder. The resolution plan received unanimous approval from the Committee of Creditors (CoC), securing 100% voting support.
The approved resolution plan entails a total payout of Rs 16,084 crore, which represents approximately 50% of the total claims received and an impressive 235% of the company’s liquidation value, estimated at Rs 6,848 crore. As per the resolution plan, financial creditors will receive an upfront cash payment of Rs 15,985 crore, while operational creditors will be compensated with Rs 99 crore. To finance the acquisition, JSW Energy plans to raise Rs 13,000 crore through debt instruments, while the remaining Rs 3,084.08 crore will be structured as quasi-equity.
KSK Mahanadi Power Company Limited owns a 3,600 MW coal-based thermal power plant in Chhattisgarh. Of this capacity, 1,800 MW (three units of 600 MW each) is currently operational and secured under long- and medium-term power purchase agreements covering 95% of the generated power. The remaining 1,800 MW is under construction, with one unit (600 MW) being 40% complete, while the remaining 1,200 MW has its balance of plant infrastructure in place. Additionally, the plant benefits from assured arrangements for water and coal transportation for its entire capacity of 3,600 MW.
With this acquisition, JSW Energy’s total locked-in thermal generation capacity reaches 7.5 GW, while its overall locked-in generation capacity expands to 28.2 GW. This strategic move positions the company well ahead of its target to achieve 20 GW capacity significantly before 2030, reinforcing its commitment to a net-zero carbon footprint by 2050.
Also See: NCLT approves OCL Iron & Steel Ltd’s Rs 113-cr resolution plan for Helios Photo Voltaic
