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Informist, Thursday, Sep 12, 2024

 

--SC: Adani Power consortium to continue to run Coastal Energen unit 

--CONTEXT: NCLAT asked Coastal Energen resolution officer to run plant 

--SC: Adani Power consortium to not dismantle Coastal Energen's plant 

 

NEW DELHI – The Supreme Court today allowed the consortium of Dickey Alternative Investment Trust and Adani Power Ltd to continue to run Coastal Energen Ltd's power plant till the National Company Law Appellate Tribunal decides a challenge against the approval of the resolution plan for Coastal Energen. The top court said that the Adani Power consortium, the successful resolution applicant for Coastal Energen, would not dismantle the 1,200 MW thermal power plant in Tuticorin or create any third party rights.

 

The Bench led by Chief Justice of India D.Y. Chandrachud noted the parties' statement that the appellate tribunal would hear the challenge by Ahmed Burari, the suspended director of Coastal Energen, and Precious Energy Holdings and Mutiara Energy Holdings, the two shareholders of the company, against the approval of the resolution plan of the Adani Power consortium on Sep 18. The apex court said that the parties would cooperate before the appellate tribunal and take no adjournments before them. 

 

"Prima facie, we are of the view that the Sep 6 order (of NCLAT) suffers from internal inconsistency. The first part indicates status quo ante has to be restored and the second part shows status quo has to be maintained as on date," the top court said. On Friday, the appellate tribunal bench of judicial member Sharad Kumar Sharma and technical member Jatindranath Swain had said that the interim resolution professional would continue to run Coastal Energen's power plant in Thootukudi, Tamil Nadu, until Sep 18, the next date of hearing. Any money generated during this period would be kept in an escrow account, the tribunal had said. 

 

Today, Chief Justice Chandrachud asked, "What was the great hurry for NCLAT to disturb the status quo on a Saturday? The committee of creditors has approved them (the successful resolution applicant) by 97% and if they have done it in their commercial wisdom, then what is the issue?". 

 

The Bench, also comprising Justice J.B. Pardiwala and Justice Manoj Misra, was hearing an appeal by the Adani consortium against the appellate tribunal's order of status quo on implementation of the consortium's resolution plan for debt-ridden Coastal Energen. 

 

Dickey Alternative Investment Trust, a Mudhra Fund, is the lead member holding 51% interest in the consortium and Adani Power holds 49%. The value of the resolution plan is 33.31 bln rupees. The debt outstanding of Coastal Energen is about 118.51 bln rupees. Coastal Energen's plant currently supplies net 558 MW to Tamil Nadu Generation and Distribution Corp Ltd, the state's distribution company, under a long-term power purchase agreement. Earlier, the Chennai bench of the tribunal had also approved the Adani consortium's resolution plan for Coastel Energen.

 

At 1256 IST, shares of Adani Power were up 2.1% at 640.50 rupees on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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