Jindal Power offers $1.68 bln for distressed Indian coal-fired power plant, say sources (updated)

KSK Energy Ventures

06/02/2024 14:40

(Updates with background in paragraph 6 and Jindal Power's
response in Paragraph 7)
    By Sarita Chaganti Singh
       NEW DELHI, Feb 6 (Reuters) - Jindal Power, a unit of
India's Jindal Steel & Power Ltd,   JNSP.NS  has submitted a 140
billion rupees ($1.69 billion)
bid for a coal-based power plant in the eastern region, two
sources familiar with the development told Reuters. 
    The company has submitted a financial bid for the KSK
Mahanadi plant that is in insolvency proceedings, and which is
being eyed by billionaire Gautam Adani's Adani Power  ADAN.NS 
and Anil Agarwal's Vedanta Ltd  VDAN.NS  among others, a source
aware of the matter said.  
    The 1,800-megawatt power plant, built by KSK Energy Ventures
 KSKE.NS , is one of many distressed coal-fired private power
stations mired in insolvency proceedings in recent years as
owners did not have fuel supplies and the funds to complete
them.
    The plant was admitted for insolvency proceedings in October
2019 but the court has not called financial bids since then. 
    The plant has cash reserves of 120 billion rupees ($1.45
billion) from operations, and total debt claims of 320 billion
rupees ($3.85 billion).
    "Jindal Power has submitted an unsolicited bid to the
authorised resolution professional for KSK Mahanadi Power
project in Chhattisgarh," one of the sources, who works for the
government said. The sources did not want to be quoted as they
were not authorised to speak to media.
    A Jindal Power spokesperson declined to comment. Sumit
Binani- the resolution professional appointed for the KSK
Mahanadi power project by the insolvency court - did not respond
immediately to queries sent by Reuters. 
    The unsolicited bid shows Indian private companies' renewed
interest in coal-based power plants. 
    The share of private investment in India's coal-based power
dwindled after 2018 due to lower demand and an ambitious thrust
by the federal government on renewable energy. However,
coal-based power plants are back in focus as India expects
demand to cross 260-gigawatts during peak hours in summer this
year. 
    India will operate new coal-fired power plants with a
combined capacity of 13.9 gigawatts until December this year,
the highest annual increase in at least six years.       
($1 = 83.0250 Indian rupees)

 (Reporting by Sarita Chaganti Singh, Editing by Louise Heavens,
Alexandra Hudson)
 ((Sarita.ChagantiSingh@thomsonreuters.com;))