JSW, Vedanta, Adani among companies keen to buy GVK Energy's asset

JSW Energy Ltd., Adani Power Ltd. and Vedanta Ltd. are among more than a dozen companies that have expressed interest in acquiring GVK Energy's 330 MW Alaknanda hydro power project in Uttarakhand, according to people familiar with the matter.

In May, insolvency proceedings were permitted against GVK Group company GVK Energy, which has five subsidiaries and owes lenders Rs 11,187 crore in direct and in direct exposure. Of these five subsidiaries, Alaknanda Hydro Power and GVK Coal (Tokisud) Company Pvt. Ltd. remain to be resolved.

Torrent Power Ltd., Sarda Energy and Mineral, Jindal Steel & Power Ltd and Jindal India Power Ltd (JILT) are some of the other companies that are interested in acquiring the Alaknanda plant, GVK Energy’s only remaining operational power plant, the people cited earlier said.

"Saturday was the last day to give expressions of interest which will be scrutinised and objections addressed. It is likely that the list of prospective applicants will be finalised later this month, following which applicants will be given another month at least to submit resolution plans," said a person aware of the details.

Resolution professional Venkata Chalam Varanasi did not respond to ET’s request for comment.

The bidding companies could not be immediately reached for comment.

The banking sector’s exposure to GVK Energy is mostly limited to corporate guarantees taken by the company for loans taken by its subsidiaries.

Phoenix ARC is the only secured creditor to the company, having taken over loans from Edelweiss Finance last year which were backed by shares as securities. GVK Energy owes Phoenix Rs 1351 crore or 12% of the total claims. IDBI Bank is the largest unsecured creditor with an exposure of Rs 1,708 crore, or 15% of the admitted claims, followed by Union Bank of India at Rs 1,379 crore (12%).

Three of GVK Energy’s subsidiaries have either been resolved through separate insolvency proceedings or are undergoing liquidation.

GVK Coal was incorporated in 2002 to supply captive fuel to the 540 MW GVK Goindwal Sahib thermal power plant.

Alaknanda Hydro Power started commercial operations in 2015 and has a power purchase agreement (PPA) with Uttar Pradesh Power Corporation Ltd. (UPPC) under which it supplies 88% of the power generated. The tenure of the PPA is 30 years from commercial operation date running up to 2045.

Companies with a networth of Rs 100 crore or financial institutions like funds with a networth of Rs 500 crore were eligible to submit an expression of interest by making a refundable earnest money deposit of Rs 1 crore.

"This project with a settled PPA is a good asset for any company wanting to expand and diversify its power portfolio," said a person aware of the details.

Expectations are that bids for this project will stretch till the end of October, with bidders carefully evaluating competition and valuation.