IL&FS's Tamil Nadu Power Company (ITPCL) may see a turnaround in its finances. In October, the plant load factor (PLF) of its Cuddalore power unit touched a new peak even as India's thermal power PLF was at an all time low.
According to data available with Business Standard, the Cuddalore plant reported a record PLF of 82 per cent in October. In the same month, the all-India thermal power PLF was at 49.18 per cent, as per data released by the Central Electricity Authority (CEA). The higher PLF of Cuddalore plant has been attributed to two major reasons -- state discom sourcing more power from this unit and an early end of the wind season, impacting wind energy generation.
IL&FS officials are hopeful the improvement will help restructure debt for the SPV. ITPCL has posted a loss for the last two financial years and currently falls in the amber category, meaning the firm can only service its operational payments and senior secured debt obligations. “Look forward to resolving its debt in consultation with the lender," C S Rajan, MD, IL&FS said.
The resolution of its debt may help the company to move to the green category, which would indicate the company can service all its payment and debt obligations.
In January 2019, rating agency Icra noted that PLF for the plant was modest but flagged high counter-party credit risk due to delay in payments from Tamil Nadu Power Generation and Distribution Company (Tangedco), which has a power purchase agreement (PPA) with the first unit for 540 megawatt of power. Less than a year back, Power Trading Corporation of India (PTC) signed a medium-term contract to procure power from the second unit for 550 Mw, which has further helped improve PLF.
With improvement seen in off-take in the last eight months, the plant generated 690 million units of power in November 2019, close to twice of what it generated in the same month last year. Revenue for the last month is pegged at Rs 315 crore. PLF for November was at 80 per cent.
As of November 2019, the combined dues from Tangedco and PTC were Rs 1,400 crore. The company is in active discussion to resolve the non-payment issue with the discom.
ITPCL is said to have approached lenders with a restructuring plan. Its total term loans were at Rs 5,557 crore. Lenders including Punjab National Bank (PNB), State Bank of India (SBI), Bank of Baroda and LIC, have an exposure to the subsidiary.