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Informist, Monday, Jan. 13, 2025

 

--Sources: Lenders OK JSW Power's INR-160-bln offer to acquire KSK Mahanadi

--Sources:JSW Power outbids Adani Power by INR 1 bln to buy KSK Mahanadi

--Sources: JSW Power emerges top bidder for KSK Mahanadi post 11 bid rounds

--Sources: Reserve price for KSK Mahanadi acquisition was INR 125 bln

--Sources: JSW Energy to fund KSK Mahanadi buy via internal funds, debt, QIP

--Sources: JSW Energy QIP for KSK Mahanadi acquisition likely in FY26

 

By Avishek Rakshit

 

KOLKATA – JSW Energy Ltd., with its offer of INR 160 billion to acquire debt-ridden KSK Mahanadi Power Co. Ltd., has outbid Adani Power Ltd., becoming the preferred bidder and securing the letter of intent from the latter's creditors under the Corporate Insolvency Resolution Process, sources told Informist.

 

JSW Energy outbid Adani Power's offer by INR 1 billion, sources said. The offer from JSW Energy to the creditors comprises a cash payment of INR 105 billion, and equity infusion of 26% which could result in a 90?sh recovery by the lenders of KSK Mahanadi Power.

 

JSW Energy has emerged as the highest bidder after 11 rounds of bidding with the reserve price of the acquisition being INR 125 billion. "The funding for the acquisition is likely to be done mostly from internal accruals and the rest could be via a qualified institutional placement, or some debts," one of the sources said. "But the QIP may not come in the current financial year but in the coming financial year."

 

Sources said that JSW Energy will consider the amount for the QIP and any amount it needs to raise through debt to fund the acquisition at a later time after the company receives the approval from the National Company Law Tribunal. JSW Energy will soon be submitting its acquisition proposal to the tribunal after it Monday, received the letter of intent from the creditors of KSK Mahanadi Power Co.

 

"The approval from NCLT will take some time after JSW Energy submits its acquisition plea, and it cannot be guessed when the approval will come," one of the sources said.

 

Other companies which JSW Energy outbid for the acquisition were NTPC Ltd., Jindal Power Ltd., Vedanta Power, and others.

 

"JSW Energy has been focussing on green energy to drive growth. However, it is now apparent that green energy alone cannot lead to growth and power (generating) companies will need to focus on thermal power as well for business growth," one of the sources said. "This explains why JSW Energy and so many other companies wanted to acquire KSK Mahanadi Power Co."

 

KSK Mahanadi Power Co., located in Chhattisgarh, owns a 3,600 MW thermal power plant, utilising domestic coal. Presently, three units of 600 MW each, totalling 1,800 MW is operational, which is 95% tied-up under long and medium-term power purchase agreements.

 

An additional 1,800 MW, comprising three units of 600 MW each, is under construction, out of which one unit is 40% complete. KSK Mahanadi Power Co. has agreements in place for domestic coal transportation, as well as water.

 

In a statement, JSW Energy said that the company currently has a locked-in thermal generation capacity at 7.5 GW, and total locked-in generation capacity at 28.2 GW. The company is targeting 20 GW of capacity before 2030, and become a net-zero carbon emission company by 2050.

 

Monday, shares of JSW Energy closed 4.1% lower at INR 517.8, and Adani Power closed 6.7% lower at INR 449.9 on the National Stock Exchange.  End

 

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

 

Edited by Akul Nishant Akhoury

 

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