Rattan India Power turns green in Q3 after project debt resolution

Shelves Phase-II of Amravati Power Project due to lack of PPA in market

Rattan India Power turned around in the current quarter ending December, 2019 to report a profit before tax of Rs 2,106 crore. It had a loss of Rs 188 crore in the corresponding quarter of the previous financial year. The profit comes after conclusion of debt resolution for its 1,350 MW Amravati power project in Maharashtra.

The company, however, has decided to not construct the envisaged second phase of the Amravati project, owing to lack of long-term power purchase agreements (PPAs) in the market.

“The company post restructuring of lending facility has considered not to construct the phase-II and accordingly, after considering the realisable value net of expected cost for dismantling the phase-II, the company has recognised impairment loss amounting to Rs 546.57 crore against capital work-in-progress,” it said in its financial results on Wednesday.

Debt restructuring for the Amravati power project concluded in December 2019 with new lenders coming on board. Goldman Sachs and Varde Partners took over Rs 4,050 crore of the total debt from the existing lenders. This also includes 15 per cent equity each in the project. The deal was through the platform of Aditya Birla Asset Reconstruction Company (ARC).

The total debt exposure of consortium of lenders was Rs 6,296 crore. The consortium of lenders led by state owned Power Finance Corporation (PFC) took 36 per cent haircut. There were 12 lenders to the projects included State Bank of India, Bank of India, Punjab National Bank, Axis Bank among others.

Speaking with Business Standard, Aman Singh, chief executive officer of Rattan India Power said the turnaround is because of the one-time settlement of its debt with the existing lenders. Speaking regarding the Amravati project, he said the project has everything in place but power procurement is not happening. “We are shelving the second phase because of lack of power procurement. There are no long-term PPAs issued by any state,” he said.

Total income of the company increased to Rs 402.15 crore during the quarter under review from Rs 389.05 crore in the year-ago period. Its expenses stood at Rs 962.88 crore as compared with Rs 577.60 crore in October-December 2018.

Power Finance Corporation witness dip in profit in Q3
 

State-owned leading financer for the power sector Power Finance Corporation reported a 13.6 per cent slide in its profit before tax at Rs 2395 crore in the December quarter. The company's PBT stood at Rs 2772 crore in the year-ago quarter, a BSE filing said. Total income of the company increased to Rs 15,878.04 crore during October-December from Rs 14,050.95 crore a year ago.

Company’s board has fixed the company's borrowing limit at Rs 90,000 crore for 2020-21, which includes Rs 55,000 long-term borrowing like term loans, bonds. Besides, the company can also raise Rs 15,000 crore through long term foreign currency bonds, Rs 5,000 crore via short term borrowings and Rs 15,000 crore via commercial papers.