Rs 6,000 cr NPA of IL&FS Tamil Nadu power arm reclassified as standard loan

In a major development, Rs 6,000 crore loan of IL&FS Tamil Nadu Power Company Ltd (ITPCL) has been reclassified from NPA to normal. The collective debt exposure of the 12 Lenders consortium, including unsecured lenders, in IL&FS Tamil Nadu Power Company Ltd was Rs. 9,600 crore which was divided into sustainable & unsustainable debt. Upon successful restructuring of the loan in September 2023, ITPCL repaid Rs.3,600 crore of debt which includes repayment of about 50% of sustainable debt and accelerated repayment of unsustainable debt.

The current outstanding debt of ITPCL is Rs.6,000 crore. “The upgrade and normalization of loans will positively impact the ongoing resolution of this asset – which is one of the biggest asset being resolved under IL&FS fold by the new Board,” said an IL&FS spokesperson

IL&FS Tamil Nadu Power Company Ltd is a special purpose vehicle (SPV), incorporated on June 26, 2006, to set up a 3,840-MW imported coal-based thermal power project at Cuddalore in Tamil Nadu.  It is promoted by IL&FS Energy Development Corporation Ltd. (IEDCL), the energy vertical of the IL&FS Group.

The project was proposed to be implemented in phases. In the first phase, the company set up a 1,200-MW (2×600 MW) power plant based on imported coal with sub-critical technology.

Phase I of the power plant has commenced its operations, with Unit I of 600 MW commissioned on September 29, 2015 and Unit II of 600 MW on April 30, 2016.

Coal for the project is being imported from Indonesia. ITPCL has a long-term PPA for the sale of 540 MW from Unit I to Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO).

For Unit II, there is no long-term PPA and ITPCL is dependent on short-term power sale agreements or sale through the power exchange.

It is worth mentioning here that the National Company Law Appellate Tribunal (NCLAT) in 2022 rejected the petition of IL&FS board to extinguish the claim of Capex Creditors and Operational Creditors of its power unit IL&FS Tamil Nadu Power Company Ltd (ITPCL). Operational creditors had claimed unpaid debt of Rs 608 crore.

Also See: NCLAT rejects IL&FS request to extinguish claims of operational creditors of TN power arm