NuPower Renewables's plan to sell arm to AMW did not materialise

The plan of Deepak Kochhar’s company NuPower Renewables to sell off its subsidiary Nupower Technologies to A-One Parts & Services, a company promoted by Aniruddha Bhuwalka of AMW Motors, for Rs 1.16 billion in 2016 did not materialise. 

The transaction failed as Bhuwalka lost interest in the project mainly because his flagship firm, AMW Motors defaulted on loans taken from a host of public sector banks since 2015, said a source. 

NuPower Technologies had a plot of land adjacent to AMW Motors’ plant site in Bhuj, Gujarat, and AMW wanted to expand its capacity to make heavy-duty tipper trucks used in mining. 

An AMW Motors official, who did not wish to be named, said the company paid Rs 10 million to NuPower Renewables to acquire the project site, but as the market for heavy-duty trucks faced weak demand since 2015, AMW's sales fell and it started defaulting on its loans worth Rs 18 billion to IDBI Bank, Punjab National Bank, and Central Bank of India.

A mail sent to NuPower Renewables did not elicit response. Bhuwalka, a close relative of Ruias of Essar group, did not respond to an e-mail but a source close to AMW said the transaction with NuPower was signed but did not go through. AMW is currently a non-performing asset on the books of public sector banks and the banks are trying to sell the assets of the firm to recover their loans.

The sale of NuPower Technologies was part of NuPower’s plans to restructure its business. In April 2015, NuPower Renewables had hived off operational capacity of 100 Mw in Tamil Nadu to Echanda Urja and another operational capacity of 34.25 Mw in Tamil Nadu to NuPower Wind Farms. The company started scouting for buyers for its third subsidiary NuPower Technologies.

NuPower, promoted by Deepak Kochhar, husband of ICICI Bank MD and CEO Chanda Kochhar, then began talks with AMW Motors, which had an integrated manufacturing facility for heavy commercial vehicles in Gujarat spread across approximately 155 acres. 

According to regulatory filings submitted to the Ministry of Corporate Affairs in FY15, AMW Motors posted a net loss of Rs 780 million on total operating income of Rs 5.80 billion as against a loss of Rs 1.02 billion on the total income of Rs 8.42 billion in FY14. 

NuPower is currently facing a Central Bureau of Investigation preliminary inquiry on a quid pro quo loan worth Rs 640 million given by Videocon Industries to NuPower after Videocon received a loan from ICICI Bank. 

The income tax department is also looking into equity investment received by NuPower from a Mauritius-based fund called DH Renewables which, in turn, is owned by Accion Diversified Strategies Fund, a company registered in Cayman Islands, a tax haven. 

NuPower, ICICI Bank Board and Videocon have denied any wrongdoing. Videocon has said its Rs 640 million loan would be returned by NuPower by 2021.