The Hyderabad bench of the National Company Law Tribunal (NCLT) today approved a plea from the resolution professional of KSK Mahanadi Power to distribute the surplus cash amounting to Rs 6400 crore among lenders. According to people with knowledge of the matter, this is the first time lenders will recover a part of their dues before a resolution is approved by the NCLT.
All bidders including Adani Power, the highest bidder offering Rs 27000 crore, may want to relook at their respective offers following the NCLT order, according to the advisors involved in resolving the distressed thermal power company.
KSK Mahanadi Power received plans from Adani Power, Capri Global Holdings, Coal India, National Thermal Power Corporation (NTPC), Vedanta, Sajjan Jindal-owned JSW Energy, Naveen Jindal-owned Jindal Power and Steel, iLab India Special Fund, Rashmi Metaliks and Sherisha Technologies, ET reported on August 3.
The company had accumulated cash and a cash balance of little over Rs 9000 crore since three 600 megawatt units were operational for the last five years under the corporate insolvency and resolution process (CIRP).
The court has ruled that after setting aside a portion of funds required for maintaining the company’s daily operations, the balance can be distributed among lenders. A banker said the surplus amount amounts to Rs 6400 crore.
The order from NCLT comes less than a week after ten bidders submitted a resolution plan for the power company. Almost all offers factored in the cash lying in the company as part of their resolution plan. Adani Power offered a Rs 27000 crore plan, which included Rs 12500 crore as upfront cash and balance in the form of cash and cash equivalent and receivables in the company.
Capri Global Holdings’ offer was Rs 25000 crore, including upfront payment, cash in the company and receivables.
PWC-supported resolution professional Sumit Binani has admitted Rs 29,330 crore.
