Liquidation firm calls for EoI in Nagpur-based AMNEPL

Venkatesh Ganesh Mumbai | Updated on August 26, 2019

AMNEPL is a special purpose vehicle promoted by Abhijeet Group and Maharashtra Airport Development Company

Liquidation firm, Vinod Kothari Consultants, has called for Expressions of Interest (EoI) for 246 mega watt (MW) of stressed power plant of Nagpur-based Abhijeet MADC Nagpur Energy Private Limited (AMNEPL).

The bid has to be made for a minimum of Rs 446 crore ($67 million) and must be submitted by 28 August, said company officials.

AMNEPL is a special purpose vehicle promoted by Abhijeet Group and Maharashtra Airport Development Company. The former holds a 76 per cent stake in the SPV and MADC holds the remaining 24 per cent.

MADC or Maharashtra Airport Development Company was set up the state government to house an international cargo hub and a Special Economic Zone (SEZ). The four power plants of AMNEPL, with 61.5 MW capacity are up for grabs.

Abhijeet Group - alleged beneficiaries of controversial coal block allotments

The plant had been operational since 2011. But, the operations were suspended from January 2014 onward as the company could not run the plant. They had to make considerably high interest payments, as a result of soaring debt.

Its lenders had referred the company to the corporate debt restructuring (CDR) cell, restructured its debt and was subsequently classified a non performing asset by Axis Bank, State Bank of Hyderabad, Bank of Maharashtra and UCO Bank.

Further, according to reports, Abhijeet Group was allegedly among the biggest beneficiaries of the controversial coal block allotments, as part of which the firm got blocks in Jharkhand and Chhattisgarh. Subsequently, the coal mining licenses granted to the company between 2004 and 2009 were canceled as part of an industry-wide cancellation of coal mining licenses, due to alleged corruption charges.

However, the liquidation order from the court has specified that the project is a going concern.

A going concern is an accounting term that refers to a company's ability to make enough money to survive or avoid bankruptcy. If a business is not a going concern, it means it's gone bankrupt and its assets gets liquidated.

Since the government ushered in Insolvency and Bankruptcy Code (IBC) in December 2016, nearly 1500 corporate debts have been brought before CIRP. 142 corporate debts have already been closed, while 63 have been withdrawn. Additionally, 302 cases have ended in liquidation, while the resolution plans have been approved in 72 cases. However, industry watchers opine that the pace has been slow due to many factors ranging from lack of qualified liquidation professionals to infrastructure such as courts.

Published on August 26, 2019

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