PFC to sue RattanIndia factory in bankruptcy court this year

The state-owned Power Finance Corp. plans to file an insolvency plea against RattanIndia Power’s 1,350MW power plant in Nashik later this year, two people with knowledge of the development said.

The plant has a 8,000 crore of debt, while PFC, the main financier of the project, has an exposure of around 3,000 crore.

“Most of our stressed plants have been resolved. The one that needs to be solved is the Sinnar (Nashik) project. We have to take it to the NCLT (National Company Law Tribunal). We will be presenting it at the NCLT this year. The debt of the project is approximately 6 crore per megawatt,” said one of the two officials.

Nashik Thermal Power Plant is located near Sinnar, 40 km from the city of Nashik in Maharashtra. The power station has an installed capacity of 1,350 MW, with coal connections from subsidiaries of Coal India Ltd (CIL).

The other official noted that PFC was in talks with the Maharashtra government to take over the stressed project, but the state government was not interested.

Officials noted that Nashik is the last major project where PFC is the primary financier and is to be sued for insolvency.

The move follows PFC’s successful resolution of the 600MW thermal power project of Jhabua Power Ltd, located in Seoni district of Madhya Pradesh, last month.

The project was resolved through the Corporate Insolvency Resolution Proceedings (CIRP) mechanism, with ownership passing to a consortium consisting of NTPC Ltd, PFC, REC Ltd and other lenders.

Last month, PFC successfully resolved the nation’s largest stressed power transmission asset – South East UP Power Transmission Company Ltd.

The transaction involved a one-time upfront settlement of 3,251 crores along with a payment of part of the existing cash balance.

PFC’s Board of Directors on August 12, 2022 approved the formation of Power Asset Management Co. (PAMC) to take over energized power assets.

PAMC will be a 50/50 joint venture between PFC and REC. REC’s Board of Directors also approved on August 5 the proposal to subscribe to 50% of the capital of PAMC.

PAMC will be a professional organization that will have the expertise to acquire energized energy assets and to operate, maintain and supplement them.

Other projects under the CIRP include the 3,600 MW KSK Mahanadi Power project and the 1,920 MW Lanco Amarkantak Power project. Bids have arrived for Lanco Amarkantak but the Committee of Creditors (CoC) has yet to select the winning bid.

For KSK Mahanadi, PAMC, the consortium of PFC and REC, along with NTPC, plan to jointly submit a bid as the CoC has been seeking new bids for the project.

“The process is being restarted and there is time left for the submission of bids until October-November. PFC, REC and NTPC will present the bid together. We have kept NTPC as a partner in this regard. We also need technical expertise. We are a financial institution. We will look into the structuring, but the operations will have to be done by someone else, so the NTPC would also participate, “said the first official quoted above .

“This is a decision to ensure that none of the projects are taken at ridiculous prices,” the official added. PMAC also bid for the Amarkantak project.

Questions sent to spokespersons for the PFC, RattanIndia, NTPC, REC and the union Department of Energy went unanswered until press time.

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