KSK Adani Group's bid of Rs 12,500 crore to acquire Mahanadi Power has prompted other bidders to revise their offers and the final figure could be much higher. Sources gave this information on Friday. KSK Mahanadi Power is expected to recover its non-performing assets (NPAs) in full after the Committee of Creditors (CoC) initiated the mechanism to challenge the bid.
Adani Group made the highest bid
However, this is almost rare in proceedings conducted under the Insolvency and Bankruptcy Code (IBC). Sources associated with the IBC arrangement have given credit to Adani Group for generating interest in KSK Mahanadi. Adani Group has made an initial high bid of Rs 12,500 crore for this troubled company. This bid is Rs 4,800 crore i.e. 62 percent more than the second placed bidder. The result has been that six out of the 10 original bidders, including NTPC, have now submitted revised proposals around the bid made by the Adani Group. This reflects strong competition which will also increase asset values
Loans to lenders will be recovered
Industry insiders said this reflects IBC's emphasis on extracting maximum value. Adani's competing bid takes KSK Mahanadi's reported cash reserves of Rs 10,000 crore and trade receivables of Rs 4,000 crore to around Rs 27,000 crore. This means that lenders can recover 92 percent of the outstanding loan. KSK Mahanadi, located in Chhattisgarh, has an installed capacity of 1,800 MW. The project, with a debt burden of about Rs 29,330 crore, was brought into the insolvency resolution process in 2019.
These companies also bid
Adani Power's bid of Rs 12,500 crore was the highest offer among competing entities. Big companies like JSW Energy, Jindal Power, Vedanta, NTPC and Coal India were involved in this process. But their bids were between Rs 6,500 crore and Rs 7,700 crore. After this, the committee of creditors decided to adopt the bid challenge system. Under the new system, the remaining claimants have placed increased bids.
Image Credit: India-Tv.