Mumbai: Lenders are staring at a near complete loss of Rs 1,200 crore loans to power producer Abhijeet MADC as they prepare to liquidate the company after three attempts to sell it as a viable company failed, said people familiar with the matter.The so-called slump sale, which would be at a steep discount to its book value, involves sale of an asset lock, stock and barrel for a lump sum where the value is for real estate and scrap value for the existing machinery, said those people who did not want to be identified.Bids will be invited for the thermal power plant, inoperative for 6 years, once the valuation reports are received, said Vinod Kothari, the court appointed liquidator of the company.
Earlier, bids were invited on going concern basis, but the same failed to find any investor interest.
Now invitation will be made for sale on a slump sale basis,Alchemist Asset Reconstruction Company, Edelweiss Asset Reconstruction and State Bank of India are likely to be the worst hit as they hold the biggest chunk of the loans to AMADC, company which was a coal-based power plant.
It has a capacity of 246 MW thermal plant, along with an additional 25 MW diesel generator.There is little hope of finding a buyer as the plant is not in working condition, highlighting the risks of lending to power companies.
Unlike a sale of an asset as a going concern there are no values assigned to individual assets and liabilities of a company in a slump sale.Lenders fixed the initial reserve price for the plant at Rs 502 crores in 2018 and since no expressions of interest (EoIs) were received the reserve price was reduced twice further in September 2019 to Rs 402 crore and further to Rs 376 crore in October 2019.
Since there has been no interest the liquidator has asked for a fresh valuation on a slump sale basis.
The power plants woes were compounded also by its potential customer, which is also facing delays.It was on a built operate and transfer (BOT) basis for a period of 33 years as a captive plant for the Multimodal International Hub Airport and Special Economic Zone (MIHAN) in Nagpur.
The slump sale will be only for the thermal power plant.
Two independent valuers have been appointed and bids could be invited as soon as next week, Kothari said.
There are multiple issues with the project.
It was supposed to be a captive plant for MIHAN which itself is struggling.
Then there are issues with regards to tariffs in the electricity regulatory commission.
The plant itself is not in working condition so chances of any recovery look slim, said a lender to the project.