Krishnapatnam port operator Navayuga Engineering and state-run Sikkim Power Investment Corporation have submitted binding bids for the Rs 15,000-crore planned hydro power project in Arunachal Pradesh that is undergoing insolvency proceedings. The 1,750-mw project awarded by the Arunachal government to Athena Energy Ventures on a 40-year concession has been stalled due to incomplete forest clearances and insufficient funds.
Athena Energy owes Rs 550 crore to Indian Bank and Corporation Bank and Corporation Bank as working capital dues that the lenders were unable to recover from the former.
Navayuga’s bid is pegged at Rs 300 crore, said sources directly briefed on the matter. Sikkim Power Investment Corporation, the first state-run utility to participate in bidding for a bankrupt company, has offered a little over `250 crore, these sources said.
Umesh Garg, the insolvency professional tasked with arriving at a resolution for the stressed power project, declined to offer comment for this news report.
Though Navayuga’s bid is said to be higher, the committee of creditors has disqualified its bid on the grounds that it violates provisions of Section 29 A of the insolvency and bankruptcy code which disallows people connected to defaulting promoters/companies from bidding for the stressed assets.
The port operator has challenged the decision at the National Company Law Tribunal (NCLT).
Athena Energy’s promoters include a consortium of state-run Power Trading Corporation, IDFC and A Sitaram Raju, according to its website. Karvy group’s MS Ramakrishna is a director of the company.
The court’s directive was in response to a petition by Independent Power Producers Association of India that sought relief from a February 12 RBI circular that provides a short, six-month window for banks to address defaulting companies before pushing them into insolvency proceedings.
The power producers’ body has claimed a number of projects would go into liquidation if they were pushed into the insolvency route and sought government intervention to identify a solution.
“There is a need to create alternate structures to rescue power projects that have offtake agreements for less than 50% of their capacity”, said KPMG’s head of resolutions and restructuring, Manish Aggarwal.
“Overall lenders will need to accept the new reality of huge debt cuts”, he said.