Adani Group and Vedanta are in fray to acquire Lanco’s Amarkantak thermal power plant located in Korba area of Chhattisgarh. The plant was admitted for insolvency proceedings by the National Company Law Tribunal (NCLT) in 2019.
Both companies are conducting due diligence on the power plant which has 600 MW operational thermal power capacity, 1,320 MW under-construction capacity, and another 1,320 MW at planning stage, after expression for interest (EoI) was invited in December 2019. None of the companies has made a financial offer yet.
The plant is housed in a special purpose vehicle (SPV) which took Rs 12,000 crore of debt from banks, but was unable to service it due to financial troubles of the parent company, Lanco Group.
The Lanco Group has been struggling with mounting losses and muted cash flows and tried to sell assets to repay debt but could not succeed. The SPV, Lanco Amarkantak Power, was dragged to NCLT over Rs 800 crore loan default by Axis Bank.
Lanco Amarkantak Power, which was incorporated in February 2001, has coal-fired thermal power units located near Pathadi village on Korba-Champa State Highway in Chhattisgarh on 1,337 acre of land.
The project has two units of 300 MW each, which are operational and currently supply electricity to Madhya Pradesh, Haryana and Chhattisgarh.
In Phase-II of development, it has two units of 660 MW each, which are currently under construction and have been delayed from their targeted commissioning in 2016-17. Phase-III intends to add two more units of 660 MW, work on which has not yet started.
Lanco Infratech has been looking for buyers for the Amarkantak thermal power project since early 2010. The project had troubles with regulators in getting approval for an increase in tariff and the Supreme Court cancelled Lanco Infratech’s rights to mine the Gare Pelma II coal mine in Chhattisgarh in 2014.
