Consortium led by Adani Power gets letter of intent to buy Coastal Energen

A consortium led by Adani Power Ltd., has been issued a letter of intent (LoI) for the acquisition of Coastal Energen Pvt., currently undergoing a corporate insolvency resolution process.

In a regulatory filing on Sunday, Adani Power announced that the resolution professional granted the LoI on Saturday, following the approval of the consortium's resolution plan by CEPL's committee of creditors.

"The implementation of the resolution plan is subject to the terms of the LOI and requisite approvals from the NCLT and any other regulatory authority under applicable laws," Adani Power said.

The consortium, spearheaded by the State Bank of India, had initially financed CEPL for establishing a 1,200-megawatt thermal power project in Tamil Nadu. However, due to delays and cost overruns, the project expenses escalated to Rs 7,870 crore, comprising a debt of Rs 6,296 crore and equity of Rs 1,574 crore, from the original cost of Rs 4,297 crore with a debt of Rs 3,323 crore.

Coastal Energen, promoted by Coal and Oil Group through Mutiara Energy Holdings Ltd., Mauritius, and Precious Energy Holdings Ltd., a Dubai-based conglomerate, operates two 600 MW units in Tamil Nadu. It has a power purchase agreement with Tamil Nadu Generation and Distribution Corp (Tangedco) for one of its units, extending until September 2028.

In October, amidst reports of APL emerging as the frontrunner to purchase the distressed power company, Mutiara proposed a total settlement of Rs 5,847 crore, including 15 per cent equity.

On Friday, Adani Power's shares ended at Rs 511.80 on the Bombay Stock Exchange (BSE), down 0.05 per cent.