Five suitors put in bids for stake in JP Power

The lenders to JPVL had sought bids to sell a stake in the firm to recover some of their dues

Five investors have put in their bids to buy at least a 30 per cent stake in debt-ridden Jaiprakash Power Ventures (JPVL), according to sources close to the development. While 11 players had initially evinced interest in picking up a stake in JPVL, that number has now shrunk to five. 

An asset reconstruction company, a private equity firm, and a power sector unit are among the five “serious contenders” and they have made a presentation before the lenders, an official involved in the bidding process said. Business Standard could, however, confirm only two names — Resurgent Power, a joint venture between ICICI Ventures and Tata Power, and Edelweiss Asset Reconstruction Company.  

A public sector bank executive said their aim was to complete the process and see the resolution before the end of the current financial year (FY18).

The lenders to JPVL had sought bids to sell a stake in the company to recover some of their dues. They have hired SBI Capital Markets and EY to carry out the sale.

The JPVL stock jumped 9.9 per cent to close at Rs 8 on the BSE on Monday.

The total public shareholding of the company is 68.84 per cent, which includes 51 per cent equity with lenders whose debt was restructured, the company said in a filing to the BSE in January. Part of its outstanding debt of Rs 3,058 crore was converted to 30.5 million equity shares. The management control of the company continues to be with the Manoj Gaur-led group.

The ICICI Bank-led group of 10 lenders holds a 51.8 per cent stake in JPVL, which had a debt of Rs 14,916 crore, according to the company’s annual report.

The company could not pay the outstanding debt to lenders. Later, they formed a joint lenders’ forum (JLF) and formulated a corrective action plan (CAP) for the company to resolve its financial stress. 

However, the company could not perform satisfactorily under the CAP, leading to the JLF finally deciding to invoke the provisions of the strategic debt restructuring scheme on July 25 last year. The lenders have a right to divest their equity holding to new promoters.

JSW Energy had, in 2015, bought two hydropower plants of Jaiprakash Power — the 300-megawatt (Mw) Himachal Baspa Power Company and 1,091-Mw Karcham Wangtoo at an enterprise value of Rs 9,575 crore. JPVL recorded a loss of Rs 761 crore for the year ended March 31. The company has an installed power generation capacity of 4,200 Mw, of which 400 Mw is from Jaypee Vishnuprayag hydropower project, while the remaining is coal-based generation.