Supreme Court (Photo: Shutterstock)
The Supreme Court on Monday revived Adani Power’s Rs 27,000-crore insolvency resolution process against the 1,800 MW KSK Mahanadi (KMP) project by setting aside the Telangana high court’s order that had stayed the bankruptcy proceedings.
Adani Power was the highest bidder for the stressed thermal project with a bid of Rs 27,000 crore, securing 92% recovery for lenders.
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A bench headed by Chief Justice DY Chandrachud said the top court had no jurisdiction to stay the insolvency proceedings or seek consolidation of insolvency proceedings of the thermal power company and its two subsidiaries – KSK Water Infrastructure and Raigarh Champa Rail Infrastructure.
The court accepted the appeal of the Committee of Creditors of KSK Mahanadi Power Company saying that HC had passed the order without intimating other parties. The HC order came on a petition filed by Uttar Pradesh Power Corp.
KSK Mahanadi Power Company had a 3,600 MW coal-based power project in Chhattisgarh. It currently has three operating units of 600 MW each and the rest of its units are in various stages of construction.
Lenders have filed claims of Rs 29.33 billion against KSK Mahanadi, which was sent for debt resolution in 2020 after the company defaulted on its debt payments.
Several banks, including the State Bank of India (SBI), have sold their loans to asset reconstruction companies (ARCs) to recover part of their dues. KSK Mahanadi had power purchase agreements with Andhra Pradesh, Tamil Nadu and Uttar Pradesh, but defaulted on loans due to lack of coal supply. The company was allotted two coal blocks in Chhattisgarh, but in 2014, following a Supreme Court ruling, the allotment was cancelled. The plant later received coal under the Ministry of Power’s “Shakti” scheme, but had to import coal due to shortage.
SBI attempted to resolve the project under its flagship SAMADHAN scheme, which was aimed at resolving stressed assets outside the NCLT. However, due to the reluctance of other lenders and a lack of buyers, the process under this plan was halted and the project was moved to bankruptcy court.
KMP had also received plans from Adani, which surpassed Capri Global, government-owned NTPC, Coal India, JSW Energy, Jindal Steel and Power, Vedanta, among others.
First published: October 14, 2024 | 20:58 IS
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