NCLT approves Rs 4,000-cr bid by Adani Power for Vidarbha Industries Power

The National Company Law Tribunal (NCLT), Mumbai Bench, has given its crucial approval to the Rs 4,000 crore resolution plan submitted by Adani Power Limited (APL) for Vidarbha Industries Power Limited (VIPL). The order, pronounced on June 18, 2025, by Sameer Kakar (Member Technical) and Shri Nilesh Sharma (Member Judicial), marks a definitive phase in the corporate insolvency resolution process (CIRP) of VIPL.

The comprehensive plan by Adani Power Limited outlines the financial restructuring and operational revival of Vidarbha Industries Power Limited. Here are the key details of the approved resolution plan:

1. Total Resolution Amount and Funding:

• Adani Power Limited’s total resolution offer stands at INR 4,000 Crores.
• The funds will be infused into Vidarbha Industries Power Limited through a combination of equity, quasi-equity, and/or shareholder debt, at Adani Power’s discretion.

2. Distribution of Funds:

• Secured Financial Creditors: These creditors will receive INR 3,706.09 Crores, representing approximately 59.78% of their admitted claims. Additionally, they will be allotted 26% of the equity shares in the Corporate Debtor.
• Operational Creditors: A sum of INR 1.00 Crore has been allocated for operational creditors, which is about 0.18% of their admitted claims. These payments are expected within 30 days of the NCLT’s approval.
• CIRP Costs: The resolution plan includes payment of INR 292.91 Crores towards unpaid estimated accrued CIRP costs, which will be paid on or before the effective date. Adani Power has committed to bearing the actual CIRP costs in priority to payments to other creditors.

3. Additional Commitments by Adani Power:

• Adani Power has affirmed that any future costs related to the revival, repair, maintenance, and upgradation of Vidarbha Industries Power Limited, after taking over, will be borne by APL from its own resources, in addition to the INR 4,000 crore resolution amount.

4. Treatment of Debts and Equity:

• The admitted financial creditor debt (excluding those under the ECB category) will be converted into equity shares of the Corporate Debtor and will undergo simultaneous capital reduction.
• Financial creditor debt under the ECB category will be extinguished.
• Existing equity shareholders will see their shareholding reduced to zero, as their interests are altered by the plan.

5. Adjustments to CIRP Costs:

• The estimated accrued and unpaid CIRP costs saw a significant reduction from an initial estimate of INR 1,470.57 Crores to INR 292.91 Crores. This decrease is primarily due to revised estimates for one-time unit revival costs and a three-year extension on the deadline for Flue Gas Desulphurisation (FGD) unit installation by the Ministry of Environment, Forest and Climate Change.

6. Identified Recoveries:

• Any gross recoveries from past regulatory matters, such as those related to the Maharashtra Electricity Regulatory Commission (MERC) judgment, including carrying costs, will be directly passed on to the Secured Financial Creditors without any deductions, regardless of when the recovery occurs.

7. Implementation and Management:

• Upon the NCLT’s approval, Adani Power Limited will assume sole and absolute control over the affairs of Vidarbha Industries Power Limited.
• The existing Suspended Board of Directors will be dissolved, and a new Board will be constituted by Adani Power Limited.
• APL will secure all necessary approvals for the plan’s implementation within one year from the NCLT approval date.

The resolution plan was unanimously approved by the Committee of Creditors (CoC) in its 10th meeting held on February 19, 2025, after a “Challenge Process” that involved multiple resolution applicants, including NTPC, Vedanta, and Capri, to ensure value maximization for all stakeholders. Adani Power had submitted a performance security of Rs 100 Crores.

Also See: Adani Power acquires yet another energy company through CIRP