FE: RattanIndia Power project: PFC seeks buyers for Rs 8,215-crore debt

9 August 2019: Power Finance Corporation (PFC) on Thursday sought bids for consortium loans worth Rs 8,215 crore to RattanIndia Power’s (RIPL) 1,350-megawatt (MW) Amravati Thermal Power Project Phase I, as a plan to settle the loans with the promoter likely fell through.

The project’s liabilities include term loans of Rs 6,940 crore, working-capital loans worth Rs 815.5 crore and non-fund-based limits to the tune of Rs 459 crore, as on September 30. SBI Capital Markets (SBICaps) is handling the sale process on behalf of lenders.

“Lenders have proposed to offer and assign their existing security, including rights on Project assets and pledge rights on shares of RIPL, as part of the assignment of outstanding debt,” PFC said in a bid document.

In May 2019, PFC had said that it was nearing a resolution for the stressed Maharashtra project. For Rattan India Amravati, PFC had received a revised one-time settlement (OTS) proposal and the company was carrying out discussions and negotiation with the borrower. Rajeev Sharma, chairman and managing director, PFC, had told reporters after the financier’s Q4FY19 results, “In Rattan India Amravati, we are expecting almost 50% recovery. We understand that this will be a faster and better route outside NCLT (National Company Law Tribunal).”

The Amravati project was selected after a Case-I competitive bidding under Section 63 of the Electricity Act, 2003 for supply of 1,200 MW (net) power to Maharashtra State Electricity Distribution Company (MSEDCL). It achieved commercial operation date (COD) on March 13, 2015.

The thermal power project is one of the large non-performing assets (NPAs) in the power sector which are awaiting resolution. In September 2018, the Supreme Court halted insolvency proceedings under the Reserve Bank of India’s (RBI) February 12, 2018 circular against seven coal-based stressed power projects with generation capacities of 10,190 MW, one of which was RattanIndia’s Amravati project.

According to the bid document, the total completion cost of the project is Rs 8,556 crore and it was funded in a debt:equity ratio of around 74:26. The units have already been commissioned and have been in operation for more than three years. Statutory clearances and approvals required for operation of the project — water supply arrangement, civil aviation clearance for chimney height and consent to operate from Maharashtra Pollution Control Board among them — are in place. “RIPL has firm PPA (power purchase agreement) for sale of 1,200 MW net from the project to MSEDCL (Maharashtra State Electricity Distribution Company) and the same would continue post the strategic sale,” PFC said in the project description, adding, “The fuel for the plant, that is, coal is available from mines in Chhattisgarh and is being supplied by SECL (South Eastern Coal Fields).”

The Financial Express

BS: NCLAT raps MCA, IL&FS board over delay in presenting resolution plan

9 August 2019: The National Company Law Appellate Tribunal (NCLAT) on Thursday pulled up the Ministry of Corporate Affairs (MCA) and the newly appointed board of Infrastructure Leasing & Financial Services (IL&FS) for inordinate delay in presenting the final resolution plan for the debt-laden firm.

“In spite of our order dated 12th July, 2019, no progress report has been filed by Union of India/IL&FS. They are allowed to file the progress report by tomorrow. We make it clear that before the next date of hearing, the Union of India must pass final order and settle the claim of all the creditors with regard to three amber or green entities,” a two-judge Bench headed by Chairperson Justice S J Mukhopadhaya said.

The three amber companies, which had to be converted to green and allowed to service debts, are Moradabad Bareilly Expressway, Jharkhand Road Projects Implementation Company, and West Gujarat Expressway.

By the next date of hearing on September 5, the MCA and the new IL&FS board will also have to present a plan for the 82 companies currently placed in the red category, the NCLAT said. The ministry or the board should, however, take permission from Justice D K Jain before selling or creating any third party rights in any of the red group companies, the NCLAT said. The resolution of all IL&FS group companies is being overseen by former Supreme Court judge Justice D K Jain.

The NCLAT has also allowed the MCA, as well as IL&FS, to call a meeting of the financial creditors and lenders to the debt-laden firm, and if needed “take up the matter on day to day basis to ensure that the total process with regard to all the amber entities”.

“They will keep it in mind that already 300 days approx have completed since the interim order was passed on 15th October, 2018,” the NCLAT said, adding that a fresh progress report should be filed by September 3.

On February 11, the central government and the new board of IL&FS had submitted an affidavit detailing three categories — green, amber, and red. The firms of the group had been classified under these categories based on their ability to service routine debt obligations.

The companies which had enough cash to service the debt of secured and unsecured creditors were placed in the green category, while those with cash to pay only secured creditors were placed under amber. Those IL&FS companies which were not in a position to service the debt of both secured or unsecured creditors were placed in the red category. 

The Business Standard reported

LM: Jet’s RP seeks lenders’ nod to liquidate assets to pay pending salaries

9 August 2019: The resolution professional (RP) overlooking the bankruptcy proceedings of grounded Jet Airways (India) Ltd on Thursday told the Mumbai bench of the National Company Law Tribunal (NCLT) that a request has been placed before the committee of creditors (CoC) to liquidate some assets to pay a part of the pending salaries to the airline’s employees.

According to resolution professional Ashish Chhawchharia, Jet Airways currently has about 7,400 employees on its payroll. During its peak, the airline had over 16,000 employees, including about 1,300 pilots.

“We have requested CoC’s permission to liquidate some assets to pay the salaries,” Chhawchharia said, adding that Jet Airways currently has no revenue from operations and, hence, paying employee salaries remains a concern.

Jet Airways, which had grounded its operations on 18 April, due to an acute fund crunch, is yet to pay salaries since January to a section of its staff, including pilots, engineers and general managers. The airline hasn’t paid salaries to the rest of its staff since March.

Employee associations of Jet Airways had earlier sought the court’s permission to release their salaries.

The NCLT bench on Thursday also heard the claims of Luckystar Pvt. Ltd, which owns Siroya Centre, the former headquarters of Jet Airways. Luckystar had earlier stated that the airline owes them dues since the airline’s rental lease for the building ended in April.

Chhawchharia informed the bench that Siroya Centre’s premises are not required anymore and the staff will be shifted to another property owned by the airline.

He also sought return of a portion of the deposit—with the deposit standing at about ₹10 crore—which was taken by Luckystar to rent out Siroya Centre to Jet Airways.

Chhawchharia said that Luckystar could deduct a part of its dues from the deposit and file claim for the remaining.

He added that this proposal will be put before the committee of creditors.

In case of a rejection from the committee of creditors, the matter will be heard in the court.

The tribunal, consisting of judges V.P. Singh and Rajesh Sharma, will hear the case again on 28 August.

On 20 June, the Mumbai bench of the National Company Law Tribunal admitted Jet Airways under the Insolvency and Bankruptcy Code (IBC).

A consortium of 26 banks led by the State Bank of India had approached the tribunal to recover dues of more than ₹8,500 crore.

Lenders have been trying to sell the beleaguered airline as a going concern for the past five months.

The LiveMint reported