Adani Group and Reliance Industries have not submitted updated bids for SKS Power Generation (Chhattisgarh), making it a five-way competition for the 600 MW thermal power project. Sarda Energy & Mines of Nagpur, Jindal Power of Delhi, NTPC, Torrent Power of Gujarat, and Vantage Point Asset Management of Singapore have all submitted updated bids to acquire SKS through the corporate insolvency resolution procedure.
Sarda, Jindal Power, and Vantage Point are at the top of the list among them with few alternatives. One of them stated, "The offers have been received in the broad range of 1,700 crore to more than 2,000 crore. "With less than 10 crore in total revenue between them, Sarda, Jindal, and Vantage are at the top of the band. To accurately examine their plans and determine the preferable bidder, banks will need to consult with each of them."
Initiation of the SKS resolution procedure took place in April 2022. The Bank of Baroda and the State Bank of India are owed a combined 1,890 crore by the company (SBI). Because to the great demand for the plant, bankers are optimistic that they will be able to recoup all of their debts. NTPC, a state-owned company, was regarded as a strong
candidate but, according to insiders, its revised bid is at the lower end of the range. NTPC is now managing the plant in Raigarh district as a result of a government decision intended to address electricity shortages.
According to a second individual involved with the negotiation process, "Of the top three bids, Jindal has a 3,600 MW power plant within 60 km of this one and Sarda has a coal mine within 50 km of this plant, making it a good acquisition for them because of the synergies at play." But, just a few operating plants with all necessary linkages are currently available, which is why everyone is so eager, the individual said.
The total cost of acquisition, assuming lenders receive their full money, comes to less than 4 crore per MW, people cited above said. That compares with 9 crore per MW required to build a similar plant today. The SKS plant has 25 years of fuel agreement with South Eastern Coalfields, a Coal India unit, with a railway line directly transporting coal to the plant - a rare facility.
Moreover, expectations of a harsh summer mean that demand for power is likely to jump in the next couple of months, presenting a good business opportunity for privately owned plants to sell power in the open market, sources said. The reason for both Adani and Reliance not increasing their bids is not known, though people familiar said both companies had re-evaluated their strategies noting the aggressive bids in the first round. Both companies could not be immediately reached.
As of Sunday afternoon, BoB Capital Markets, a process advisor, and Ashish Rathi, a resolution expert, had not responded to emails requesting comment. Creditors won't want to incur the risk of delaying payment, therefore they will favour bidders with a bigger cash component.
The 600 MW plant's operation has been suspended after its Hong Kong-listed owner Agritrade Resources was unable to maintain it owing to personal financial issues. 2019 saw the purchase of the plant by Agritrade Resources following a one-time agreement with a group of lenders headed by SBI.