TPT: NEWSVedanta’s power sales up 22% in FY19 on record load at TSPL

13 April 2019: Vedanta Ltd accomplished 22 per cent growth in commercial power sales in FY19, riding on higher sales from its flagship plant at Talwandi Sabo (Punjab).

During 2018-19, Vedanta’s total power sales stood at 13,517 million units, buoyed by higher availability at Talwandi Sabo Power Ltd (TSPL) which overcame a mishap in the coal conveyor in Q1 to post a record Plant Load Factor (PLF) of 88 per cent.

“Power sales at TSPL were 4,778 million units with 83 per cent availability in H2 (October-March) FY2019. At TSPL, the Power Purchase Agreement (PPA) with the Punjab State Electricity Board compensates us based on the availability of the plant,” Vedanta said in its production release for the year ended March 31, 2019.

The 600 Mw Independent Power Producer (IPP) at Bharat Aluminium Company, owned by Vedanta also shored up its power sales. The unit witnessed a marked improvement in its PLF, rising from 40 per cent in the second half (October-March) of FY18 to 51 per cent in H1 of FY19 and inching up to 54 per cent in H2 of the last financial year. PLF hike was powered by improved coal availability. Power sold from the BALCO plant spiked 41 per cent to 2168 million units in FY19

On the flip side, Vedanta’s power operations were throttled by its 600 Mw Jharsuguda IPP in Odisha. The plant located in the vicinity of the Group owned aluminium smelters, could barely operate at 26 per cent PLF in H2 of last fiscal, weighed down by coal shortages. Power sale from this unit fell 11 per cent to 1172 million units in FY19.

As reported on

CNBCTV18: MCA objects to Sterling Biotech being removed from bankruptcy code

13 April 2019: The Ministry of Corporate Affairs (MCA) on April 13 has objected to the decision for Sterling Biotech to come out from the insolvency bankruptcy code (IBC).

The Western Regional Director of the MCA, Manmohan Juneja, moved an application in the National Company Law Tribunal (NCLT) to stop this application as its promoters are absconding.

Juneja filed a detailed affidavit where he mentioned the wrong doings of Sterling Biotech. The MCA’s argument in court, as stated by its legal director  Sanjay Shourie, is that the company’s promoters are facing a probe from multiple agencies and that its promoters are out of the net of investigation agencies.

Sterling Biotech took loans of over Rs 5,000 crore from a consortium led by Andhra Bank which had turned into non-performing assets.

The company’s absconding promoters, Nitin Sandesara and Chetankumar Sandesara, are offering to return all the money to the banks.

As per the FIR, the total pending dues of the group of companies were Rs 5,383 crore as on December 31, 2016. The Enforcement Directorate (ED) has taken the FIR into cognisance.

The ED has arrested few people in this case including Delhi-based businessman Gagan Dhawan, former Andhra Bank director Anup Garg and Sterling Biotech Ltd director Rajbhhushan Dixit. It had also attached assets worth over Rs 4,700 crore of the pharmaceutical firm in June this year.

Multiple prosecution complaints or chargesheets have also been filed by it before a special court here.

CNBCTV18 reported

ET: NCLT stays order to withdraw Sterling SEZ’s insolvency resolution process

13 April 2019: The dedicated bankruptcy court has stayed its earlier order to allow the withdrawal of corporate insolvency process of Sterling SEZ & Infrastructure, a firm owned by brothers Nitin and Chetan Sandesara, believed to be abroad and running away from Indian law.

The Mumbai-bench of the National Company Law Tribunal (NCLT) on Friday stayed its earlier order after the Ministry of Corporate Affairs (MCA) informed the tribunal that a similar withdrawal is pending in another bench from the same promoters and the government is keen to intervene in the matter.

“The government representative has informed the members in chamber after which the bench had decided to stay the earlier withdrawal,” said a senior government official privy to the development. “The tribunal will hear the case on March 25 and 26 for Sterling SEZ and Sterling Biotech, respectively.”

Earlier on Wednesday, the tribunal had allowed the one-time settlement payment to lenders by the company’s promoters.

Currently, Gujarat-based Sterling Group’s three companies, including Sterling Biotech, Sterling SEZ & Infrastructure and its trading arm Sterling International are facing insolvency cases in Mumbai NCLT. The group owes about Rs 15,000 crore to its financial and operational creditors. Sterling SEZ owes over Rs 4,500 crore to its financial and operational lenders.

On Wednesday, in the case of Sterling SEZ & Infrastructure, the NCLT allowed the withdrawal of the Corporate Insolvency Resolution Process (CIRP) in the matter of Sterling SEZ as approved by over 92% of the creditors as Sandesaras had offered to pay about half the dues to settle the dispute.

While in the case of Sterling Biotech, the promoters have offered to pay about Rs 3,100 crore to settle dues of around Rs 8,100 crore and over 90% of the lenders have agreed to withdraw the case.

However, since the promoters are absconding, the tribunal has directed regulators and probe agencies to file their response before allowing lenders to settle and withdraw the case.

The Economic Times reported

LM: Jet Airways to seek interim funding from lenders on Monday

13 April 2019: Jet Airways (India) Ltd, struggling to stay afloat and avoid being taken to the bankruptcy court, will on Monday meet with lenders—led by the State Bank of India (SBI)—with a fresh demand for interim funding.

The airline has suspended its international operations till Monday afternoon.

SBI Capital Markets Ltd, which is managing a Jet Airways stake sale, got expressions of interest (EoI) from about five investors until about an hour before the end of a four-day window that ended on Friday.

These investors, including Jet Airways shareholder Etihad Airways PJSC, National Investment and Infrastructure Fund (NIIF) and a couple of private equity funds, will now be asked to put in financial bids, a person privy to the development said before Friday’s deadline drew to a close.

An update on the Jet Airways stake sale process was awaited from SBI Caps at the time of publishing this story.

Civil aviation secretary Pradeep Singh Kharola said in Delhi that Jet Airways executives had a meeting with bankers on Friday where they put forth their funding requirements.

“Discussions on interim funding are on. They have been asked to rework their requirement. They will again approach their banks on Monday. The future course of action will be decided depending on what the banks decide,” said Kharola.

The secretary said that Jet Airways was operating only 11 flights as of Friday, and the number could come down further.

However, a person familiar with the operations of the airline said that the company owns 16 aircraft that it has no reason to take them off from service.

Jet Airways’ liquidity crisis could not have come at a worse time—the government is busy with Lok Sabha elections and officials are cautious about taking decisions in an environment of political uncertainty.

Kharola had a meeting with Nripendra Misra, principal secretary to the prime minister, on Friday but officials did not confirm if it had anything to do with Jet Airways. The government is keen to salvage the airline and prevent it from collapsing, but does not want to give ammunition to the opposition over any allegations that it went out of its way to support a private company.

Jet Airways had informed stock exchanges last month of a lender-led resolution plan under which it was to get ₹1,500 crore in emergency funding. However, lenders have been releasing funds only in small amounts and the airline has found this insufficient for running its operations.

“Sadly, while the airline was supposed to get a cash infusion of ₹1,500 crore, nothing has happened till now,” said Kiran Pawaskar, a Nationalist Congress Party legislator, and a senior member of All India Jet Airways Officers and Staff Association.

Pawaskar pointed out that airline staff are not getting paid and said that lenders should at least try to keep the airline afloat till the bidding process is completed.

Mint had on 11 April reported that private equity (PE) firms TPG Capital and Indigo Partners, NIIF, and Etihad Airways have submitted their expressions of interest.

“We will soon take legal recourse and also file FIRs against the management for salary delays,” Pawaskar said.

Pilots of Jet Airways have also threatened to take legal action against the management of the cash-strapped airline if salaries pending for the last three months are not paid by 14 April. Aviation minister Suresh Prabhu tweeted on Friday that his ministry would “review issues related to Jet” and “take steps to minimise passenger inconvenience and ensure their safety”.

The LiveMint reported

FE: Bhushan Power insolvency: NCLT to conclude BPSL hearing by April 15

13 April 2019: The National Company Law Tribunal (NCLT) will conclude hearing on Bhushan Power and Steel (BPSL) insolvency case by April 15. Insolvency resolution process for the company was admitted by the principal bench of the NCLT on July 26, 2017 on a plea of Punjab National Bank.

“We want to conclude hearing on the BPSL matter on Monday. There will be no further argument beyond Monday,” NCLT’s principal bench, headed by president justice MM Kumar, said on Friday.

The tribunal is expected to reserve its order on April 15 after hearing the counsel of JSW Steel, the highest bidder for BPSL, and is expected to ask all parties to submit a two-page note if they want to provide any further information. It has been more than 600 days since BPSL was admitted by the NCLT. The Insolvency and Bankruptcy Code permits a maximum of 270 days for the resolution of a company admitted by the insolvency court.

JSW Steel has offered to pay Rs 19,350 crore to the financial creditors of the debt-ridden BPSL, implying a near 60% haircut for lenders. Apart from this, the Sajan-Jindal promoted company has offered to pay operational creditors a sum of Rs 350 crore against their admitted claims of Rs 733 crore. Tata Steel’s total bid is for an amount of Rs 17,000 crore.

A clutch of 34 financial creditors have claimed Rs 47,303 crore from the company as on January 3, 2019, of which, the resolution professional (RP) has admitted claims worth Rs 47,150 crore. Operational creditors, numbering 1,778, have claimed Rs 2,320 crore from BPSL though the admitted amount is Rs 733 crore.

BPSL’s 3.1 million tonne per annum (mtpa) steel making capacity will catapult JSW Steel as India’s largest steel company, outpacing Tata Steel, with a capacity of over 22 mtpa.

The Financial Express reported

BS:CERC okays new tariff plan for Adani Power’s Mundra plant in Gujarat

13 April 2019: The Central Electricity Regulatory Commission (CERC) on Friday approved Adani Power’s revised power purchase agreement (PPA) for its Mundra power project (4,620 Mw) with Gujarat. The relief for the power generator comes after seven years of pleading for pass through of increased cost of imported coal.

The CERC approved the new terms of the PPA and tariff structure for Adani Mundra, which was devised based on the recommendations of a High Powered Committee (HPC) constituted by the Gujarat government last year. The HPC had recommended changes to both parts of the tariff — capacity charge (fixed cost) and energy charge or cost of coal (variable cost).

Tata Power, which was seeking similar relief for its 4,000 Mw Ultra Mega Power Plant (UMPP) at the same location, is not under the purview of this judgment. Tata Power has been directed by the CERC to get the approval for the revised tariff from all the states that procure power from the UMPP. Company executives said they were yet to receive approval from all the states.

Under the new PPA, capacity charge or the fixed cost of the unit has been reduced by 20 paise per unit (kWh), following lenders taking a cut on some portion of the debt repayment. Power developers repay debt through capacity charge, while variable charge is the return on investment for the developer.

The energy/variable charge will be revised monthly and is capped at $110/tonne for 6,322 Kcal/kg grade of coal.

Any price escalation beyond it will be borne by the developer, Adani. The revised energy charges under the amended PPA will come into effect from October 15, 2018, the CERC ordered. In an exchange notification, Adani Power said the amendments “will allow Adani Power Mundra to address the under-recovery of fuel costs”.

The CERC has also allowed the extension of this amended PPA by 10 more years at the same rate. The developer will have to share the mining profit that will come from sourcing coal from its own mines outside India. Any additional capacity that comes at this project site will follow the same tariff directive.

A Gujarat Urja Vikas Nigam official told Business Standard the state discom would look to implement the revised PPA in accordance with the mandated date. “With Adani and other plants running at sub-par capacity, we were forced to procure power from the open exchange at costlier tariffs. The order will now help us save on the same.

We hope that in the near future, other plants lagging in capacity will also be revived,” the official said.

Adani Power Mundra was commissioned in 2008 at a tariff of Rs 2.35 per unit. The imported coal project had quoted record low tariff with singular coal cost for 25 years. However, imported coal prices escalated in 2010. Adani, along with Tata Power, petitioned for compensatory tariff. The CERC provided relief in 2014. It was, then, denied by an appellate tribunal, and again awarded by the same in 2016. The Supreme Court quashed any compensation to the units in April 2017. It directed the CERC “to compute relief according to the respective PPA”.

Meanwhile, the Gujarat government formed an HPC to formulate a relief plan for the imported coal-based plants in its territory, the lenders and the consumers. The move was in response to Tata and Adani pleading with the state to buy equity in their projects, as they were unable to operate with high coal cost and low tariffs. The developers had asked the state to take over the equity in these projects.

“If these projects are not rehabilitated, the closure can be imminent and permanent, leading to a significant loss of generation capacity in the western region, which cannot be compensated from other generation sources at a similar tariff. The consequent demand and supply mismatch can have an adverse impact on the economic growth of Gujarat, since this capacity constitutes a significant proportion of its energy basket,” the CERC said.

Impact check

  • Capacity charge reduced by 20 paise per kWh
  • Project availability to be increased to 90%
  • Penalty if project availability falls below 80%
  • Energy charge to be computed every month, to be passed on to consumer
  • Coal cost capped at $110 a tonne, developer to bear cost above $110
  • PPA extended by 10 more years.

The Business Standard reported