Jindal Power to acquire Bhadreshwar Vidyut as lenders approve Rs 500 cr bid

As per the provisions of the Insolvency & Bankruptcy Code (IBC), the resolution professional of the debt-ridden thermal power producer will send the plan to the NCLT for final approval

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Jindal Power Limited is set to acquire Bhadreshwar Vidyut for nearly Rs 500 crore as the lenders of the Gujarat-based thermal power producer have approved its bid.

The Committee of Creditors (CoC) of Bhadreshwar Vidyut, which is currently going through an insolvency resolution process, has voted in favour of the resolution plan by Jindal Power Limited (JPL), a Naveen Jindal Group company, according to industry sources.

As per the provisions of the Insolvency & Bankruptcy Code (IBC), the resolution professional of the debt-ridden thermal power producer will send the plan to the National Company Law Tribunal for final approval.

A source close to the deal said, "Jindal Power was the highest bidder in the second challenge process. The company will now work towards completing the acquisition within the next six months".

In a rigorous multi-round bidding, each participants were given a chance to improve their offers. Eventually, Jindal Power emerged as the highest and sole bidder in the final round, he added.

JPL plans to fund its around Rs 500 crore bid entirely through internal accruals, and committed Rs 25-50 crore additionally for capital expenditure to ensure operational efficiency post-acquisition, he noted.

After completion, the acquisition will be crucial for a strategic expansion of the Jindal Group, reinforcing its presence in Gujarat and significantly bolstering its power generation portfolio.

The move aligns with the company's long-term growth strategy of expanding its energy footprint across India while ensuring financial sustainability, the source said.

As Jindal Power moves swiftly to integrate Bhadreshwar Vidyut into its portfolio, industry experts anticipate that this acquisition will breathe new life into Gujarat's power sector, ensuring energy reliability and economic growth.

Bhadreshwar Vidyut, formerly known as OPGS Power Gujarat, operates two 150 MW coal-based power plants in Kutch. However, financial difficulties pushed the company into a crisis, leading to its admission into corporate insolvency proceedings at the National Company Law Tribunal (NCLT) Chennai in October 2022, following a petition by the State Bank of India.

The company's debt was initially pegged at Rs 1,200 crore, later restructured to Rs 850 crore to facilitate a resolution.

However, lenders rejected the recast, forcing the company into insolvency. The distressed asset became a prime target for strategic investors, with Jindal Power emerging as the front-runner to bring the plant back to life.

An email query sent to the company remained unanswered.

The Naveen Jindal Group, through Jindal Power, already operates 4,300 MW of thermal power capacity. With the addition of Bhadreshwar Vidyut's 300 MW capacity, its total installed thermal power capacity will now rise to 4,600 MW.

Beyond thermal power, the Jindal Group has ambitious plans for renewable energy expansion, targeting 12 GW of renewable power capacity, along with storage facilities and large-scale green hydrogen production by 2030.