FE: Jet Airways resolution process: Another foreign entity shows interest

24 August 2019: The resolution professional (RP) for Jet Airways has received a fresh expression of interest (EoI) from a “known foreign entity”, two people with knowledge of the matter told FE. The committee of creditors (CoC) for Jet Airways will meet on August 26 to consider the proposal, which came in this week. The CoC will also try to resolve the dispute over Siroya Centre, Jet’s headquarters till recently, sources said.

“A fresh EoI was received this week which looks promising. Since it came after the deadline had ended on August 10, it will be taken up for the CoC’s consideration on Monday. Of the three EoIs that were submitted before the deadline, Volcan Investments has officially withdrawn its EoI this week and Avantulo group was not provisionally shortlisted,” one of the persons mentioned above said.

Volcan Investments is the family-owned trust of Anil Agarwal, the founder and executive chairman of Vedanta Resources.

Etihad Airways, a strategic partner of Jet Airways, also backed out of the resolution process earlier this month stating “there remained very significant issues relating to Jet’s liabilities.” Before the August 10 deadline, two other parties — Panama-based Avantulo Group and a Russian entity, Treasury RA Creator — had submitted EoIs.

The CoC will also take up the settlement proposal put forth by the legal counsel for Luckystar, the owner of Siroya Centre, over the disputed premises. Luckystar had approached the tribunal last month seeking to repossess Siroya Centre, the six-storey building which was the headquarters of Jet Airways; the lease expired on June 7. The legal counsel for Luckystar has since put forth a settlement proposal, which, if agreed upon by the CoC, will lead to Jet Airways vacating the premises.

Additionally, the CoC will take up the settlement proposal put forth by HDFC regarding the dispute on keeping Godrej BKC out of Jet’s resolution proceedings. The National Company Law Tribunal (NCLT) will hear both matters on August 28.

The CoC will also discuss the delayed release of the Rs 70-crore interim financing approved by lenders during the first meeting on July 16. Of that amount, only Rs 10 crore has so far been disbursed by the State Bank of India. The RP’s legal counsel on Friday told the the National Company Law Tribunal that releasing the funds is essential for preserving Jet’s assets, and for covering legal and other costs. The legal counsel will file an application seeking the NCLT’s directions on the delay.

The NCLT initiated the corporate insolvency resolution process for Jet Airways on June 20. Judge VP Singh, who passed the insolvency order, called the resolution of the airline a matter of “national importance” and had urged the resolution professional to complete the process within 90 days. Jet Airways was grounded on April 17 after lenders refused to provide emergency funding to continue operations.

The Financial Express reported

FE: UPPCL banned from buying power from exchanges on alleged lapses

24 August 2019: In a severe blow to Uttar Pradesh Power Corporation (UPPCL), Power System Operation Corporation (Posoco) has blocked the company from purchasing any electricity from power exchanges due to alleged lapses.

UPPCL has faced the action for deliberately keeping state power generating companies, including independent power producers, out of the ambit of the Union power ministry’s order regarding implementation of a payment security mechanism-based scheduling of power at intra-state level.

Imposing curbs on the UP company from August 20, Posoco said that “short term open access (STOA) bilateral transactions for purchase of power by UPPCL will not be granted by NRLDC”.

It advised power exchanges not to allow purchase of power by UPPCL till a written confirmation is received from SLDC, UP, stating that payment security in respect of intra-state generators is available.

Faced with this piquant scenario, the cash-strapped UPPCL has asked its power distribution companies (discoms) to launch a drive to disconnect electric supply of consumers who have more than `10,000 dues and have not paid any bill since April 1.

UPPCL chairman has asked discom MDs to undertake at least 250 disconnections in each division of all districts. He is believed to have told them that it would not be possible for the UPPCL to provide uninterrupted power unless it was paid for.

It may be mentioned that UPPCL had made arrangements to issue letters of credit (LCs) worth `2,100 crore for inter-state power on a weekly revolving basis, which effectively kept the intra-state power generation companies (gencos), including both the state-owned generating stations as well as private power generating units, out of the system.

Interestingly, NTPC and NHPC, the two major CPSUs, have always had a payment security mechanism with UPPCL. Other plants that have now been covered under the LC system are the four Case-I plants – KSK Power, MB Power, PTC TRN and RKM Power, NPCIL, Meja Thermal Power and some solar power producers.

Private power producers that have been kept out of the ambit include Bajaj’s 1980 MW Lalitpur Power Plant, Lanco’s 1200 MW plant, Prayagraj Power 1980 MW plant in Bara, Reliance Power’s 1200 MW Rosa thermal power plant, GVK Hydro’s 330 MW Alaknanda plant and Bajaj Energy’s 450 MW.

“The UPPCL had deliberately misinterpreted the MoP order. The entire effort behind the Centre’s circular was to put an end to the erratic payment behaviour of discoms. It is a clear-cut order and there was no scope for misrepresentation,” said a power sector specialist on condition of anonymity.

According to sources, UPPCL authorities are trying to persuade Bajaj Energy to withdraw its complaint and help lift the ban on it buying power from the exchanges by assuring it that a certain amount of payment would be made to them every day.

The Financial Express reported