Jindal Power, backed by Naveen Jindal, has withdrawn from the competition to purchase Lanco Amarkantak Power. Adani Power made an offer for the distressed thermal power company undergoing corporate insolvency proceedings.
After the withdrawal of Jindal Power, now only three bidders are left in the fray. These include Adani Power, Reliance Industries and Power Finance Corporation-led consortium - will participate in the proposed auction process.
Lanco Amarkantak Power is going through corporate insolvency proceedings. Lanco Amarkantak Power runs a coal-based thermal power project on the Korba-Champa state highway in Chhattisgarh. In the first phase, electricity is being generated from two units of 300-300 MW. From these, electricity is being supplied to Haryana, Madhya Pradesh and Chhattisgarh.
According to persons with knowledge of the situation, Jindal Power applied to withdraw its petition with the Amravati National Company Law Tribunal (NCLT).
It requested permission from the tribunal in mid-January to take part in the power company's sale process. Lenders responded by requesting a formal guarantee that Jindal Power will make an unconditional cash offer. Additionally, lenders asked them to abide by all Request For Resolution Plant (RFRP) terms.
Jindal Power made a Rs 4,203 crore cash offer and a Rs 100-crore bank guarantee on January 16 in response to a petition the tribunal received on January 12 asking for permission to bid for Lanco Amarkantak. These developments were covered by ET on January 13 and January 17, respectively. A bit more than Adani Power's Rs 4,100 crore offer from a month ago, Jindal Power is making an offer of Rs 4,203 crore.
Adani Power increased its bid to Rs 4,100 crore from Rs 3,650 crore made in November in a desperate attempt to buy the business. Adani's unsolicited offer, however, came nearly 11 months after a consortium led by the PFC received 95% of the vote from lenders in favour of a Rs 3,020-crore resolution plan.
Lenders were seeking NCLT permission when Adani made an offer, while the CCI had already approved the PFC-led consortium's acquisition. Lenders therefore asked NCLT for permission to examine Adani's proposal, which was made after the voting process was over. The tribunal approved lenders to run a new auction this month to sell the thermal power company, with Adani's ₹4,100 crore offer serving as the starting bid. According to the individuals mentioned above, Reliance Industries, who first provided a resolution plan, will also be invited to participate in the auction in addition to the PFC-led consortium.
Lanco Amarkantak's first phase, which is fully operational, has two units of 300 MW each.
There will be two 600 MW units in the second phase, which is presently under development. Due to operations from the first phase, the company has Rs 1,800 crore in cash.
