Jindal Power (JPL), a subsidiary of Jindal Steel & Power, is set to acquire Simhapuri Energy's 600 MW power plant that runs on imported coal, people aware of the development said.
JPL will acquire the power plant in Andhra Pradesh's Nellore district for around 300 crore and the deal is likely to be sealed in over a week, they said. JPL did not respond to an email sent on Monday seeking comment. Simhapuri Energy is currently under liquidation.
"JPL will acquire the asset and is planning to operate it by importing coal from Indonesia and Africa. The company may begin operating the plant by the third quarter of this fiscal," said an industry executive aware of the development.
According to a 2020 corporate insolvency resolution process document, Simhapuri Energy had taken secured loans of 2,474 crore from a consortium of 19 banks, led by State Bank of India and Canara Bank.It defaulted on debt of 636 crore with an overdue interest of 308 crore. SBI took it to court in 2020.
The company's functioning, according to industry executives, was severely affected when the plant was kept idle to reserve power capacity for Andhra Pradesh discoms. JPL holds thermal, hydro and renewable power assets with an installed capacity of 3,400 MW.
According to the company's website, its arm Jindal Mozambique Minerais Limitada owns and operates a 3 million tonne per annum mining concession at Chirodzi, Tete, in Mozambique. The mine has been operational since March 2013 and production can be expanded to 10 MTPA. Jindal mines coal in Mozambique and exports coking coal to its steel plant in India. It has allocated capacity on the Sena rail line. A 300 MW power plant is to be developed within the mining concession by a Jindal entity, Jindal Investimentos Lda.
"Capital cost wise, JPL's acquisition cost stands at 60 lakh per megawatt. Building a new plant would have cost the company 6 crore per megawatt. JPL is acquiring the power plant at a very attractive valuation under the liquidation process," said another executive aware of the development. Jindal Steel & Power is planning to set up a 2.25 MTPA integrated steel plant.