Insolvency process: Lenders resolve two large stressed power sector assets

Lenders have finalised the sale of GMR Chhattisgarh Energy and Prayagraj Power Generation Company

Lenders have finalised the sale of two large stressed power sector assets — GMR Chhattisgarh Energy and Prayagraj Power Generation Company — avoiding any need for insolvency proceedings against the companies.

In the first case, a former subsidiary of Jaiprakash Associates, Prayagraj owes lenders about Rs 110 billion in outstanding loans. Earlier, lenders took a controlling stake in the power producer under the strategic debt restructuring (SDR) scheme, which allows the conversion of loans into equity.

Despite the company undergoing the SDR process, there was a risk that lenders will have to refer the company for insolvency proceedings under the Insolvency and