Clash Of The Titans: RIL, Adani Power Ready To Compete In Lanco Amarkantak Power Auction
November 24, 2022: The highest bidder Adani Power submitted Rs. 2,950 crore offer will be the base price of the November 25 auction.
Mukesh Ambani-controlled Reliance Industries Ltd (RIL) and Gautam Adani-led Adani Power will go head-to-head in the auction to be held on November 25 in the battle to acquire coal-based power project Lenco Amarkantak Power. the troubled power project is undergoing corporate bankruptcy.
It is important to mention in this context that this is the first time that two of India’s largest corporate houses will compete directly against each other for assets.
A consortium of Power Finance Corporation and REC Limited (formerly Rural Electrification Corporation Limited), both state-owned, also placed bids for the project. If RIL’s bid is successful, it will be the oil-to-telecom conglomerate’s foray into coal-fired power generation.
In the first round of the resolution plan, RIL was the highest bidder and Adani Power topped the second round, ET reported citing people familiar with the matter.
The PFC-REC duo was third in both rounds. In the second round, Adani raised Rs. 2,950 crores was bid, of which Rs. 1,800 crores will be the upfront payment, and the remaining Rs. 1,150 crores was stuck over five years, a person told the financial daily.
RIL has invested Rs. 2,000 crore upfront payment plan while PFC-REC combines Rs. 3,870 crores has been offered which freezes over 10-12 years.
More importantly, the highest bidder Adani Power submitted Rs. 2,950 crore offer will be the base price of the November 25 auction.
It may be mentioned here that the lenders decided to hold an auction to identify the highest bidder at the 51st Committee of Creditors meeting.
Norms of the Insolvency and Bankruptcy Code (IBC) do not prevent debt holders from bidding for a company undergoing corporate insolvency.
Saurabh Kumar Tikmani, a resolution professional (RP) backed by KPMG, secured from 17 lenders Rs. 14,632 crore claims have been accepted.
In June 2018, Axis Bank moved the National Company Law Tribunal (NCLT) against Chhattisgarh-based Lenco after it started defaulting on its loans.
Meanwhile, Future Retail and SKS Power are among the other distressed assets over which RIL and Adani are expected to compete.
Both submitted Expressions of Interest (EoIs) for these two institutions. However, there is no clarity on whether any of these firms will submit a bid.
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