JSW Energy outbids Adani Power for KSK Mahanadi with Rs 15,985 crore offer

JSW Energy leads KSK Mahanadi auction with a Rs 15,985 crore bid, outbidding Adani Power by Rs 100 crore; the two-day auction saw intense bidding among six major players

JSW Energy emerged as the highest bidder for KSK Mahanadi Power, offering Rs 15,985 crore to financial creditors and surpassing Adani Power in an auction concluded on Saturday, according to a report by The Economic Times.

 

The two-day bidding event saw six companies competing. Adani Power withdrew from the competition after submitting a final bid of Rs 15,885 crore in the 10th round. JSW Energy, the only bidder in the 11th round, exceeded Adani’s offer by Rs 100 crore. Both JSW and Adani proposed a 26 per cent equity stake to lenders and an additional Rs 100 crore to operational creditors.

 

 

Capri Global, a financial services firm, also participated but exited with a final bid of Rs 15,850 crore in the 10th round. Other participants included Jindal Power, led by Naveen Jindal, Vedanta of Anil Agarwal, and the government-owned NTPC Ltd, who were active until the 9th round, the report said.

Creditor claims

Financial creditors’ claims amounting to Rs 29,330 crore were admitted by the resolution professional. For lenders, the immediate recovery is projected at around Rs 26,485 crore, or 90 per cent, combining JSW's offer and additional cash and receivables of Rs 10,500 crore. Including the 26 per cent equity stake, recovery could exceed 100 per cent, according to a lender.

 

In August, the National Company Law Tribunal (NCLT) approved the distribution of Rs 6,400 crore in cash from the company's assets.

 

This acquisition would mark JSW Energy's third major power sector acquisition. Previously, it acquired Ind Barath Energy (Utkal), with a 700 MW capacity, in December 2022 for Rs 1,048 crore, and in March 2023, JSW Neo Energy, a JSW subsidiary, acquired a renewable energy portfolio of 1,753 MW from Mytrah Energy for around Rs 10,150 crore. KSK Mahanadi Power, located in Chhattisgarh, operates three coal-based units of 600 MW each.

Adani Power’s interest in KSK Mahanadi Power

Adani Power, which has been interested in KSK Mahanadi Power, initially offered Rs 10,300 crore in 2018 but withdrew in early 2019 following tariff changes by the Uttar Pradesh government. Under India’s Insolvency and Bankruptcy Code (IBC), Adani Power has acquired at least three other power companies: Avantha Power’s Korba West, Coastal Energen, and Lanco Amarkantak.

 

Following the auction, JSW Energy and other bidders will submit a final resolution outlining the payment structure, after which lenders will vote on the resolution plan. The resolution professional initially set a reserve price of Rs 12,500 crore, guided by Adani Power's high upfront bid in the first round, which included Rs 27,000 crore in total — consisting of Rs 12,500 crore in immediate payment, Rs 10,400 crore in cash reserves, and a mix of receivables, the report said.

 

The resolution of KSK Mahanadi’s debt has faced delays since entering NCLT proceedings in 2019 due to ongoing legal issues. With verified claims totalling Rs 16,165 crore, about a dozen lenders sold their debts to various asset reconstruction companies (ARCs) due to delays.

 

Currently, six ARCs collectively hold 54.4 per cent of verified claims, including Aditya Birla ARC, a joint venture of Aditya Birla Capital and Varde Partners, which controls 34 per cent of the company. In India’s insolvency process, a minimum of 66 per cent lender approval is required to pass a resolution, allowing any stakeholder with over 34 per cent to block it, the report said.