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JSW Energy has recalled its bid for acquiring the thermal power plant of Ind-Bharat Energy (Utkal) through the insolvency process initiated in 2019 due to the Covid pandemic outbreak.
The plan comes at a time when it has taken a conscious decision not to venture into thermal power generation to improve its ESG (environment, social and governance) rating.
The resolution plan of JSW Energy was approved by Committee of Creditors (CoC) in October, 2019 and the plan was filed with the National Company Law Tribunal for approval.
In the intervening period of 15 months since the submission of resolution plan, a material adverse change event as defined by the resolution plan has occurred, said JSW Energy in a statement on Tuesday.
The material adverse event entitles the company to terminate the resolution plan and accordingly the company has served a notice to the resolution professional and CoC to terminate the resolution plan with immediate effect, it added.
JSW Energy had agreed to make upfront payment of ₹ 845 crore for the under- construction pit-head 700-MW Odisha-based thermal power plant being build by Ind-Barath.
The company was admitted to the Hyderabad Bench of the NCLT and both JSW Energy and Vedanta were in the race to acquire the insolvent firm.
It had coal linkage from Mahanadi Coalfields, a Coal India subsidiary, and PPAs signed with Odisha and Tamil Nadu governments.
Ind-Barath is owned by Australia-based asset manager Macquarie Group which has over 99 per cent stake in the company. In 2015, Macquarie had lent ₹ 750 crore to Ind-Bharat against convertible bonds. Two years later, Macquarie is believed to have converted the debt instrument into equity, thus acquiring a majority ownership. Later, Macquarie itself dragged Ind-Bharat to NCLT in June, 2018 owing to a delay in commissioning of the project.
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