11 buyers line up for Jaiprakash Power

Adani, Tata, JSW Energy among those to show interest

Even at a time when the power generation sector is under stress, lenders of Jaiprakash Power Ventures have managed to get as many as 11 suitors for the beleaguered company. Adani Power, JSW Energy and Resurgent, a joint venture of ICICI Ventures and Tata Power, are among those who have put in expressions of interest.

While two of the Jaiprakash group companies — Jaiprakash Infrastructure and Jaiprakash Associates — are under insolvency resolution, Jaiprakash Power is under strategic debt restructuring (SDR). A consortium of banks, including IDBI and SBI, had taken over the company last year. 

The total public shareholding of the company is 68.84 per cent, which includes 51 per cent equity with lenders whose debt was restructured, the company said in a filing to the BSE in January. A part of its outstanding debt of Rs 3,058 crore was converted to 30.5 million equity shares. The management control of the company continued to be with the Manoj Gaur-led group. While emails to JSW Energy and Adani spokespersons remained unanswered, Tata Power Managing Director Anil Sardana did not comment on the bid. Tata Power had acquired 25 per cent equity in Resurgent Power, founded by a consortium of two sovereign funds, an overseas pension fund from Canada and private equity fund ICICI Ventures. 

Bidding for the buy-out of lender stake concluded earlier this week, said a person close to the development. Both Gautam Adani and Sajjan Jindal-led groups have acquired power assets in the past. Adani and Tata Power, however, have their respective Mundra mega power plants in distress.

JSW Energy had, in 2015, bought two hydropower plants of Jaiprakash Power — the 300-Mw Himachal Baspa Power Company and 1,091-Mw Karcham Wangtoo at an enterprise value of Rs 9,575 crore. Jaiprakash Power Ventures recorded a loss of Rs 761 crore for year ended March 31.  The company has an installed power generation capacity of 4,200 Mw, of which 400 Mw is from Jaypaee Vishnuprayag hydropower project, while the remaining is coal-based generation.

The company could not pay the outstanding debt to lenders. The lenders had formed a joint lenders’ forum (JLF) and formulated a corrective action plan (CAP) for the company in order to resolve its financial stress. 

However, the company could not perform satisfactorily under the CAP, leading to the JLF finally deciding to invoke the provisions of SDR on July 25 last year. The lenders have a right to divest their equity holding to new promoters.

What is hurting JP power plants?

• Jaypee Nigrie and Bina power plants adversely impacted by MP tariff regulations
• Power offtake from Bina was only for few hours, forcing sale in spot
• Non-availability of power purchase agreements and transmission constraints