Rattanindia Power's debt resolution attracts overseas investors into Indian power sector

Rattanindia Power has closed a One-Time Settlement Scheme (OTS) transaction for debt resolution with its consortium of 12 lenders led by PFC and SBI. These existing lenders have assigned the existing principal debt of approx. Rs. 6,574 crore to a set of new investors and lenders, led by marquee foreign funds like Goldman Sachs and Varde Partners (through the Aditya Birla ARC) for Rs. 4,050 crore.

This is the first successful scheme to have been closed under the RBI's Prudential Framework for resolution of Stressed Assets of 07 June 2019 and the largest in terms of size outside the NCLT framework attracting global investors without any change in the existing management.

This first of its kind transaction in which foreign investors have replaced Indian lenders through a process of resolution outside the NCLT framework has opened new doors for fresh capital to flow into the distressed Indian power sector. While most deals in the power sector, resolved under the NCLT framework in the past have been settled at Rs. 1.2-1.5 crore per MW, this transaction closed at Rs 3 crore per MW has unlocked greater value and win-win for all stakeholders.

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