The National Company Law Tribunal, Hyderabad has approved the resolution plan for debt-strapped Sai Lilagar Power Generation Limited 86 MW (2x43), part of the KSK Group.

A Bench of Ratakonda Murali, Member Judicial and Veera Brahma Rao Arekapudi, Member Technical, have approved the resolution plan of Indermani Mineral India Private Limited for ₹85 crore on a case initiated by the debtor Axis Bank against the power company for defaulting on payments.

While the power company was due ₹387.88 crore, the bid of the Resolution Plan proponent of ₹85 crore was approved. Significantly, while ₹2 crore is upfront payment, the rest of the funds will be repaid over 15 years at 9 per cent interest rate.

To recover the dues from the power company, Axis Bank moved the NCLT under the Insolvency and Bankruptcy Code, 2016 and the tribunal directed resolution proceedings.

The Hyderabad-based KSK Energy is a power generation company, which is with debt ridden due to difficulties in securing coal linkages leading to mounting debt and delays in project completion.

While the first unit of the Sai Lilaghar was set up in 2006, the second one was commissioned in 2011. However, due to mounting debt and fuel linkage issues, its functioning was affected leading to payment default.

The power project and the company are due ₹387.88 crore to secured creditors and additional funds to unsecured creditors. Along with various dues and interest, the total payment is estimated at ₹1,167 crore.

An independent valuer appointed to asses the value of the project has estimated the fair value of the power plant at ₹255.62 crore and liquidation value of ₹94.14 crore. The Committee of Creditors approved the bid of Indermani of ₹87.80 crore, which was approved by the Tribunal. During the resolution process, Edelweiss Resolution Advisors and Kakode Associates were engaged. About six firms had evinced interest in the project.