New Delhi: Lenders are taking about a dozen stressed power projects, including Jaiprakash Associates’ Prayagraj PowerGen, KSK Mahanadi, Maheshwar Hydro, Essar Mahan, Jindal India Thermal and GMR Chhattisgarh, to the NCLT after courts denied extension of the RBI defined deadline for resolving these non-performing accounts (NPA) outside the bankruptcy process.
Sources said that a list of 11 power projects, including some of the names mentioned above, has been finalised by lenders and it would be referred to the National Company Law Tribunal (NCLT) over the new few days. Banks have about 15 days time to complete the process and refer NPA accounts with over Rs 2,000 crore exposure to the bankruptcy court after the initial 180-day resolution window ended on August 27.
“Out of the 34 stressed power projects with a total capacity of 40,000 MW that were identified as stressed by the finance ministry, about 14 are incomplete and have already been referred to NCLT or are in different stages of resolution. About eight are in advanced stage of resolution outside IBC where lenders are either restructuring the debt or have initiated sale proceedings. The balance 12 odd projects, where various schemes like Pariwartan or Samadhan were being worked out will now go to NCLT and lenders would work out resolution as directed by the bankruptcy court,” said a government official privy to the development.
As per sources, the list of companies that will go to NCLT also includes Korba West Power Company, Sravant Energy, GMR Rajamundry, Lanco Kondapalli, RVK Energy, and Panduranga Energy. The total exposure of banks in these projects is to the tune of Rs 60,000 crore.
On 12 February, the Reserve Bank of India (RBI) had set a 180-day timeline starting March 1 for resolving large corporate loan defaults, failing which banks have to refer these cases for insolvency proceedings.
The Independent Private Power Producers’ Association of India (IPPAI), challenged this order in Allahabad High Court on behalf of a few power projects seeking exemption contenting that stress in the sector was not on account of promoters turning wilful defaulters but a host of operational issues such as lack of statutory clearances, power purchase agreements, fuel linkages and tariff disputes.
The Allahabad high court late last month refused to grant interim relief to power companies against the RBI circular. Consequently, several power companies are now being referred to NCLT.
The high court had earlier ordered lenders to avoid acting against these power producers.
A high-level empowered panel led by the cabinet secretary is also simultaneously working on ways to address the prime reasons of stress in the sector and work out a resolution that protects some of the these prized assets from being sold under distress with 50-60 per cent haircut for banks. In its order, the HC has also asked the high-level empowered committee on power to decide within two months on the resolution in consultation with RBI....