| Finally, there seems to be light at the end of the tunnel for the 208 MW Spectrum Power Generation Ltd (SPGL).
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| Asset Reconstruction Company India (Arcil) has acquired 65 per cent of the Rs 1100 crore worth of debt of SPGL from various banks and institutions and is in the process of acquiring another 10 per cent.
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| Once this is done, over the next one month, Arcil is expected to scout for a buyer for the troubled power company in which Rolls Royce holds 31 per cent stake.
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| SPGL, one of the fast track power projects of the country, is promoted by M Kishan Rao’s Bambino Group along with AV Mohan Rao’s Spectrum Power Technologies (SPT) in the US and Rolls Royce Godavri Power Ltd.
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| Bambino and SPT holds 18 and 17 per cent stakes, respectively, and banks and financial Institutions hold 34 per cent stake in the gas based power project at Kakinada in Andhra Pradesh.
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| Lenders to the project, led by Industrial Development Bank of India (IDBI) tried to run the project but gave up after managing it for two years.
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| Recently, Arcil bought bulk of their debt. “The asset reconstruction company has started sending feelers to the prospective buyers. There has been huge interest as it is a good project and the capacity can be ramped up to 500 MW,” a source close to the development said.
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| The lenders to the project include IDBI, ICICI Bank and State Bank of India besides Life Insurance Corporation, Unit Trust of India and a few other banks like Dena Bank, Punjab National Bank, State Bank of Hyderabad, State Bank of Patiala, State Bank of Bikaner and Jaipur and Ing Vysya Bank.
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| The project had commenced implementation in April 1994 at an estimated cost of Rs 778 crore. Commercial production had started in April 1998. SPGL had entered into operating and maintenance contract with Rolls Royce since April 1998 and is operating at plant load factor (PLF) of 80 per cent.
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| The company had a power purchase agreement (PPA) with Transmission Corporation of Andhra Pradesh Ltd (APTRANSCO) for a period of 18 years starting from April 1998. Last year, PricewaterhouseCoopers (PwC) had valued the assets of loss-making SPGL in the range of Rs 650-750 crore.
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| According to one official with a leading private sector power company, the project is plagued with litigations but despite this prospective buyers would be willing to pay a good price for the plant as it is a gas-based one and is situated close to abundant sources of the fuel on the East coast. |
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