PFC to take RattanIndia plant to bankruptcy court this year

State-run Power Finance Corp. plans to file an insolvency plea against RattanIndia Power’s 1350MW Nashik power plant within this year, said two people aware of the development.

The plant has a ₹8,000 crore debt, while PFC, the lead financier in the project, has an exposure of around ₹3,000 crore.

“Most of our stressed plants have been resolved. The one which needs to be resolved is the Sinnar (Nashik) project. We have to take it to NCLT (National Company Law Tribunal). We will take it to NCLT this year. The debt of the project is about ₹6 crore per megawatt,” said one of the two officials.

The Nashik thermal power plant in situated near Sinnar, 40 km from Nashik city in Maharashtra. The plant has an installed capacity of 1,350MW, with coal linkages from Coal India Ltd (CIL) subsidiaries.

The other official noted that PFC was in talks with the Maharashtra government to take over the stressed project but that the state government was not interested.

The officials noted that Nashik is the last major project where PFC is the lead financier and needs to be taken for insolvency.

The move follows PFC’s successful resolution of the 600 MW thermal power project of Jhabua Power Ltd, situated in the Seoni district of Madhya Pradesh, last month.

The project was resolved through the Corporate Insolvency Resolution Process (CIRP) mechanism, with ownership being transferred to a consortium of NTPC Ltd, PFC, REC Ltd and other lenders.

Last month, PFC successfully resolved the country’s largest stressed asset in the power transmission sector— South East UP Power Transmission Company Ltd.

The transaction involved a one-time upfront settlement amount of ₹3,251 crore along with a payout of part of the existing cash balance.

The board of PFC, on 12 August 2022, approved the creation of Power Asset Management Co. (PAMC) to take over stressed power assets.

PAMC will be a 50:50 joint venture between PFC & REC. The REC board also approved the proposal for subscribing to 50% equity in PAMC on 5 August.

PAMC will be a professional organization which will have the expertise to acquire stressed power assets and operate, maintain and complete them.

Other projects under CIRP include the 3,600MW KSK Mahanadi Power project and the 1,920MW Lanco Amarkantak Power project. Bids have come for Lanco Amarkantak but the committee of creditors (CoC) are yet to select the winning bid.

For KSK Mahanadi, PAMC, the consortium of PFC and REC, along with NTPC, plan to jointly submit a bid as the CoC has sought fresh bids for the project.

“The process is being restarted, and there is time for bid submission till October-November. PFC, REC and NTPC together will put in the bid. We have kept NTPC as a partner in that. We need technical expertise also. We are a financial institution. We will look into the structuring, but the operations will have to be done by someone else, and so NTPC would also take a stake in that,” said the first official mentioned above.

“This is a decision to ensure that none of the projects are taken at throwaway prices,” the official added. PMAC has also bid for the Amarkantak project.

Queries sent spokespeople for PFC, RattanIndia, NTPC, REC and the union ministry of power remained unanswered till press time.

rituraj.baruah@livemint.com