Lanco Amarkantak Power creditors to vote on Adani Power's Rs 4,100 cr bid

Creditors of distressed thermal power firm Lanco Amarkantak Power will soon vote on a proposal to deal with Adani Power's Rs 4,100 crore unsought bid, according to a report by The Economic Times (ET). The resolution professional (RP) will move to the National Company Law Tribunal (NCLT) for directions on the sale process, provided over 66 per cent of lenders approve this offer.

Saurabh Kumar Tikmani, a resolution professional backed by accounting firm KPMG, will also ask for instructions on withdrawing the Power Finance Corporation-led consortium's resolution plan for Lanco Amarkantak.

Adani Power, Reliance Industries and the PFC-led consortium were vying in contention for Lanco Amarkantak. At an auction held in December 2022, the PFC-led consortium submitted a bid for the struggling thermal power firm. The consortium submitted a bid of Rs 3,020 crore, whereas Adani and Reliance, who offered Rs 2,950 crore and Rs 2,103 crore, respectively, did not participate, stating that norms had been contravened during the sale process.

In January of 2023, 95 per cent of creditors gave nod to the Rs 3,020 crore proposal given by the PFC-led consortium and the RP applied with the NCLT to approve the PFC plan.

An unsolicited bid of Rs 3,650 crore was submitted by Adani Power, which was later improved to Rs 4,100 crore. A source told ET that Adani Power's bid could get the nod as the NCLT has yet not accepted the PFC-led consortium's resolution plan. The RP will invite all three bidders to take part in an auction if the court allows lenders to consider Adani's offer.

Bringing PFC and REC -- the two creditors with 41 per cent share in debt -- on board will be a hurdle in the path for Adani. Both the creditors are also part of the winning consortium and have veto power.

The Insolvency and Bankruptcy Code (IBC) does not prevent debtholders from bidding for a company. Anyone with over 34 per cent debt can block a resolution; conversely, a plan is approved if 66 per cent of lenders approve it.

Creditors are not forbidden to bid for a company. The Insolvency and Bankruptcy Code (IBC) states that a resolution plan is approved if 66 per cent of lenders give the nod. Rs 14,632 crore of claims from 17 lenders have been admitted by Lanco Amarkantak Power.