Meenakshi Energy now a wholly-owned subsidiary of Vedanta
Indian mining and metals giant Vedanta Limited has completed the acquisition of Meenakshi Energy Limited, a previously debt-ridden thermal power company. This marks the culmination of a process that began in January 2023 under the Corporate Insolvency Resolution Process (CIRP) framework.
Vedanta emerged as the successful bidder for Meenakshi in January, offering a total consideration of Rs. 1,440 crore. The deal involved Vedanta acquiring 100% of Meenakshi’s paid-up share capital and management control. As part of the agreement, Vedanta has now been allotted 10 lakh (1 million) fully paid-up equity shares of Rs. 10 each in Meenakshi, making it a wholly-owned subsidiary of the company.
This acquisition strengthens Vedanta’s presence in the power sector, adding Meenakshi’s 1,000-megawatt coal-based power plant in Andhra Pradesh to its portfolio. While the future operational plans for Meenakshi remain unclear, Vedanta has indicated its intention to explore options like short-term and medium-term power purchase agreements to cater to market needs.
Earlier this year, the Hyderabad bench of the National Company Law Tribunal (NCLT) on 10 August approved the resolution plan submitted by Vedanta Ltd for Nellore, Andhra Pradesh-based Meenakshi Energy.
The resolution plan offers to pay Rs 1,440 crore to creditors of Meenakshi Energy, which owes over Rs 4,625 crore to its financial as well as operational creditors. Of the Rs 4,625 crore, Rs 3,945 crore was financial debt.
Out of the total consideration Rs 312 crore will be paid upfront and balance Rs 1,128 crore will be in the form of secured unlisted non-convertible debentures issued by Meenakshi Energy Limited to the Financial Creditors to be repaid in five equal instalments over a period of 5 years starting from the end of 2nd year.
The average liquidation value of the assets of Meenakshi Energy has been arrived at Rs. 1,100 Crores while the average fair value arrived was Rs 2,150 crores.
The Committee of Creditors had earlier approved the resolution plan submitted by Vedanta Ltd with a vote share of 94.96%. Resolution plan submitted by Vedanta Ltd was preferred over other two bids by Jindal Power Limited and Prudent ARC Limited & Vizag Minerals and Logistics Private Limited (PAL-VMML).
Also See: NCLT approves Vedanta’s Rs 1,440-cr resolution plan for Meenakshi Energy
