Adani Power, Jindal Power, and Vedanta are among the twelve corporations that have expressed an early interest in buying struggling producer GVK Power (Goindwal Sahib). On an application submitted by Axis Bank, the Hyderabad bench of the National Company Law Tribunal last October allowed GVK Power (Goindwal Sahib) for corporate insolvency.
GVK Power (Goindwal Sahib), with whom Punjab State Power Corporation (PSPC) has a power purchase agreement (PPA), also submitted an expression of interest (EoI). According to the individuals originally referenced, Sherisha Technologies, a member of the Refex Industries group, also submitted an EoI. According to the people, other companies who submitted EoIs were Megha Engineering & Infrastructure, Rashmi Metaliks, KLJ Resources, India Coke and Power, iLabs Investments, RKG Fund, and Capri Global. According to a notification made on the Insolvency and Bankruptcy Board of India website,
Ravi Sethia, the resolution specialist supported by KPMG, has admitted Rs 6,584 crore claims from twelve financial creditors. GVK Power's parent firm is GVK Power and Infrastructure (Goindwal Sahib). The RP did not reply to any remarks. Goindwal Sahib-based GVK Power runs Punjab has two 270 MW each thermal power facilities that supply coal through a partnership with Coal India.
The state government ended the PPA with GVK in October 2021, citing the exorbitant prices the electricity producer was charging. The then-Congress administration delivered on an election pledge by terminating the PPA. When the Shiromani Akali Dal-BJP coalition was in office earlier, the Punjab government had already signed the PPA with GVK Power. Following the cancellation, the firm and the state government engaged in a number of legal battles.
At a Swiss auction in April 2021, Varde Partners, supported by Aditya Birla Asset Reconstruction Co, purchased the distressed power producer's principal loans for Rs 170 crore. According to one of the people, the ARC bought the loans for 19 paise on each rupee of principal. The GVK Group has been discussing a one-time loan settlement with lenders since 2017. An agreement between creditors was also signed by banks. However, disagreements about the compensation amount prevented negotiations from reaching a resolution.
The corporation later offered a settlement in 2019 between 27 and 28 paise per rupee, but the talks stalled because to the Covid-19 outbreak. At that time, Deutsche Bank (DB), a secured senior creditor who had invested Rs 300 crore in bonds of the power firm, was going to finance the settlement offer to lenders. Local lenders made the decision to divide up Rs 293 crore from a trust and retention account in July 2020.
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