RattanIndia Power is looking to raise Rs 500 crore working capital from its existing lenders to resume 1,350-mw Sinnar thermal plant in Nashik, even as its creditors are working on a resolution plan for the debt-laden company.
The company is looking at resuming operations as it has received an LoI (letter of intent) from Maharashtra State Electricity Distribution Company Limited (MSEDCL) for a 25-year power purchase agreement to supply 507 megawatt.
Last year, RattanIndia had restructured the debt of its 1,350 mw thermal plant in Amravati in Maharashtra after roping in Goldman Sachs and Varde Partners, which came on board as equity investors taking over Rs 4,050 crore debt from existing lenders, who had pumped in Rs 6,574 crore into the project.
Commissioned in June 2017, the 1,350-mw Sinnar plant - having a debt of around Rs 7,000 crore - has five units of 270 mw each.
The plant was shut for the past two years. The management is keen to restart at least two units to meet the PPA.
"The Amravati plant, where we managed to get one-time settlement offer, was operating efficiently. However, the Sinnar plant is shut due to various reasons. We are looking at a similar OTS model for Sinnar plant but to do that we need to make the plant operational.
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"But we don't have the sufficient funds to restart the plant, therefore we are approaching our lenders for a Rs 500 crore working capital,"RattanIndia Chairman Rajiv Rattan told PTI.
The lenders, including State Bank of India,C entral Bank of India, Punjab National Bank , REC and Power Finance Corporation, have an exposure of Rs 7,000 crore to Nashik plant.
"We need support from banks for a bank guarantee of Rs 200 crore to execute PPA with MSEDCL along with working capital of Rs 500 crore, which is essential for adding value to the asset," Rattan said.
Sinnar plant already has all clearances in place, including adequate water and coal linkages, he added.
"Once the PPA is signed, we can resume work," he added.
Whether the lenders would be ready to provide additional capital given Rs 7,000 crore NPA, he said, "if the plant is not operationalised then there would be substantial erosion in the value of the asset, which will be against the interest of everyone including the lenders".
Sinnar plant is located on a 1,069.35-acre plot in the Nashik SEZ and has coal allocation agreements with South Eastern Coalfields and Mahanadi Coalfields (for 5.226 mtpa).
After the one time restructuring in December last year, RattanIndia had reported a consolidated net profit of Rs 1,657.81 crore for the third quarter against a loss of Rs 1,378.91 crore registered in Q3 FY2019.