Sri City-KCR Enterprises get NCLT nod to acquire Sai Wardha Power

V Rishi Kumar Hyderabad | Updated on November 06, 2019

First resolution for a stressed thermal asset in the country

The National Company Law Tribunal, Hyderabad has approved the Resolution Plan of the consortium of Sri City Pvt Ltd and KCR Enterprise LLP facilitating them to take over KSK Energy Ventures’ Sai Wardha Power Generation Ltd located in Chandrapur in Maharashtra.

This is the first settled resolution for a coal-fired thermal power plant in the country. The consortium of Sri City manages the multipurpose economic zone in Andhra Pradesh, and KCR Enterprise LLP is promoted by serial entrepreneur and ace investor Srini Raju.

In their order, the NCLT members said: “The Resolution Plan stands approved and the same is binding on corporate debtor, its employees, members, creditors including the Central and State Governments and any local authority to whom debt was to be paid.”

The applicant had appointed Ernst & Young Merchant Banking Services and Duff and Phelps India as valuers for the purpose of determining the fair value and the liquidation value of the corporate debtor.

The Committee of Creditors included IDBI Bank, Standard Chartered Bank, OBC,Assets Care and Reconstruction Enterprises Ltd, among others.

In November 2018, the NCLT had admitted a petition against KSK Group entity Sai Wardha Power whose total outstanding debt was estimated at ₹3,349 crore, with IDBI Bank having an exposure of ₹1,367 crore.

The NCLT had admitted the insolvency petition filed by Fund India Opportunities II Pte Ltd and Vista ITCL who had approached the Tribunal raising their claims. Admitting the petition, NCLT appointed V Venkatachalam as the interim resolution professional.

Sai Wardha Power, is part of the KSK Group which has a portfolio of over 2400 MW, and is part of the mandatory resolution of stressed power assets.

While there were a couple of other participants during the expression of interest, the final plan was submitted only by the Sri City-KCR Enterprise consortium.

While Duff & Phelps had arrived at liquidation value of ₹585 crore and fair value of ₹1,161 crore, Ernst & Young arrived at ₹608.50 crore as liquidation value and fair value of ₹1,897 crore. The average was taken as ₹597 crore for liquidation value and ₹1,529 crore as fair value.

Published on November 06, 2019

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