SKS Power Insolvency: Creditors receive Rs 1,950 crore from Sarda Energy & Mining

The lenders of SKS Power Generation have received an upfront payment of Rs 1,950 crore from Sarda Energy and Mining, the successful bidder for the debt-ridden thermal power producer, the insolvency appellate tribunal NCLAT was informed on Tuesday. Moreover, allegations of "mala fide" intention or aligning towards any party while approving the resolution plan from Sarda Energy were also rejected during the proceedings of the NCLAT by senior advocate Mukul Rohatahi, representing the lenders.

A proper evaluation was made based on the earlier direction given by the NCLAT in this matter and a "clear decision was made" by the Committee of Creditors (CoC) of SKS Power Generation.

"There is no case of malafide and we are not aligning to one party or the other. We have taken a call based on the commercial decision," he said.

Torrent Power and Singapore-based Vantage Point Asset Management Pte, which were also in the race to acquire SKS Power Generation, have challenged the NCLT order, approving the bids of Sarda Energy before the National Company Law Appellate Tribunal (NCLAT).

They are challenging the order passed by the Mumbai-based bench of the National Company Law Tribunal (NCLT), which on August 13, approved Sarda Energy and Mining's (SEML) bid. The tribunal also rejected their pleas to oppose the selection of SEML's bid by the CoC.

Torrent has claimed to be the highest bidder for SKS Power Generation.

Senior advocate Abhishek Manu Singhvi appearing for the petitioners questioned the rationale for the selection of Sarda Energy and Mining's bid. He alleged that the offer was changed in the garb of clarification sought over the resolution plan by it.

Alleging mala fide intention, Singhvi said the CoC allowed an increase in the margin money (bank guarantee) also from Rs 103 crore to Rs 161 crore, and that too in a "discriminatory fashion".

While referring to the NCLT order approving Sarda's bid, he said that the NCLT is not a "rubber stamping" body and has followed the CoC decision in this entire matter. They have dismissed the plea of Torrent based on the 34th CoC meeting, and a copy of the minutes of the said meeting was not even provided to it.

"We are seeking a stay of the process," submitted Singhvi, adding there is a misreading of the previous order passed by the NCLAT in this matter.

"This is discriminatory. Let everybody have a chance, let the best man win ....," he said Over the claim of Torrent Power to be the highest bidder, Rohatgi said the selection of bids was done following a host of factors, which included the "commercial wisdom" of the lenders.

He also added that the clarifications sought by the lenders over the resolution plan submitted by Sarda Energy and Mining do not amount to a modification of the bid.

"Yesterday on August 19, the CoC received a sum of Rs 1,950 crore from the successful resolution applicant Sarda Energy and Mining. Therefore it's not a matter for consideration for the second time," he noted.

The hearing remained inconclusive, and the NCLAT would continue its hearing on Wednesday.

Along with Torrent Power and Vantage Point Asset Management, several other companies like NTPC and Jindal Power were in the race. However, SEML's resolution plan was voted by the Committee of Creditors (CoC) in favour of SKS Power Generation.

Torrent Power approached the NCLT after the Resolution Professional of SKS Power Generation filed a petition to seek the insolvency tribunal's approval for the SEML's bid.

The Ahmedabad-based company contended before the NCLT that it had submitted the highest upfront cash payment to the creditors of SKS Power Generation after incorporating the observations of the RP and lenders.

SKS Power Generation has set up a coal-based Thermal Power Plant at Binjkote and Durramuda in Raigarh District, Chhattisgarh. The thermal power project consists of 4X300 MW capacity power generating units.

To date, Phase I of 2X300 MW capacity has been completed, and the company is currently in the midst of commencing execution of Phase II 2X300 MW capacity, according to the information available on its website.