Only Resurgent Power, Brookfield bid for Jaiprakash Power

Jaiprakash Power had earlier converted Rs 3,058 crore of its debts into equity upon invocation of strategic debt restructuring

Only two out of 11 suitors have put in final bids for the beleaguered Jaiprakash Power Ventures. On the block, as part of a strategic debt restructuring (SDR), the company has drawn non-binding bids from Resurgent Power Ventures Pte and Brookfield Asset Management, a person close to the development said.

Earlier, Adani Power and JSW Energy and Edelweiss ARC were among those formally expressing interest in the company carrying a debt of Rs 12,440 crore as of March-end. Of the five companies that gave a presentation to the lenders’ consortium, only two put in bids. The person quoted above said both the bids implied banks going in for huge haircuts.

While two Jaypee group companies — Jaiprakash Infrastructure and Jaiprakash Associates — are undergoing insolvency, Jaiprakash Power Ventures is undergoing SDR. A consortium of lenders, including IDBI Bank and State Bank of India, had taken over Jaiprakash Power last year, although the management remained with the Manoj Gaur-led group.

The company had earlier converted Rs 3,058 crore of its debts into equity upon invocation of SDR. The promoters were earlier in discussions with a 23-member lending consortium for implementation of a full resolution plan, which included flexible restructuring of project loans to Bina Thermal Power Plant under 5/25 scheme and rejig of balance loans. This, however, did not work out.

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 BSE in January.

A senior bank executive said lenders have given weightage to those coming as strategic investor with degree of active participation. Edelweiss Asset Reconstruction Company (ARC) had given bid with offer to issue Securities Receipts — a paper issued to lenders and they get money as ARC receives money from proceeds.

Both Gautam Adani and Sajjan Jindal-led groups have acquired power assets in the past. In 2015, JSW Energy bought two hydropower plants of Jaiprakash Power — the 300-megawatt (Mw) Himachal Baspa Power Company and 1,091-Mw Karcham Wangtoo unit — for an enterprise value of Rs 9,575 crore. Adani and Tata Power, however, find their Mundra mega power plants in distress. Tata Power had last year 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.

Jaiprakash Power recorded a loss of Rs 761 crore for the financial year ended March 31. The company has an installed power generation capacity of 4,200 Mw, of which 400 Mw is from Vishnuprayag Hydropower Project, while the remaining is coal-based.

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 CAP. The JLF finally decided to invoke the provisions of SDR on July 25 last year. The lenders have a right to divest their equity holding to new promoters.