Lenders ask KSK Mahanadi Power Company bidders to better Adani offer

Adani has offered Rs 27,000 cr for Chhattisgarh project

Lenders of KSK Mahanadi Power Company, a bankrupt electricity generator, are planning to hold another round of auction in the first week of September after Adani group emerged as the highest bidder for the company with a Rs 27,000 crore offer.

The bidders will be asked to better the Adani offer for the company, which operates a 3,600 MW coal-based power project in Chhattisgarh. Currently, the company has three operational units of 600 MW each and the rest of its units are under various stages of construction.

In the previous round, Adani pipped Capri Global, government-owned NTPC, Coal India, JSW Energy, Jindal Steel and Power, Vedanta, among others. One of the bidders said they are looking at the option to bid under the “Swiss challenge” for the project, which already has a cash of Rs 9,000 crore in its books. As the plant is already operating and generating cash, it is considered as a good asset by the bidders for acquisition.

The lenders have made claims of Rs 29,330 crore against KSK Mahanadi, which was sent for debt resolution in 2020 after the firm defaulted on its debt payments.

Several banks, including the State Bank of India (SBI), have sold their loans to asset reconstruction companies (ARCs) to recover part of their dues. KSK Mahanadi had power purchase agreements with Andhra Pradesh, Tamil Nadu and Uttar Pradesh but defaulted on loans due to lack of coal supply. The company was allotted two coal blocks in Chhattisgarh but in 2014, following a Supreme Court judgement, the allocation was cancelled. Later, the plant received coal linkage under the “Shakti" scheme of the power ministry but had to import coal due to a shortfall.

SBI tried to resolve the project under its flagship scheme SAMADHAN, which was aimed at resolution of stressed assets outside the NCLT. However, due to reluctance of other lenders and lack of buyers, the process under this scheme was halted and the project was moved to the bankruptcy court.