One-time settlement deal offered by Ruias for Essar Power Gujarat

9 Dec 2022 , 10:43 AM

Ruias is offering a one-time settlement of Rs 1,600 crore to settle ₹ 4,500 crore of loans taken for the Salaya plant in Gujarat’s Jamnagar district, effectively giving the banks a return of around 36% on their fees.

The promoters of Essar Power Gujarat Ruias are in talks with creditors to save the company from bankruptcy by offering a one-time settlement. This will be implemented by the end of the current fiscal year. The company is working out legal and other details to finalize the settlement.

According to various reports, Essar deposited around 25% of the amount in tranches in an escrow account. The company is financing this through proceeds from the sale of certain ports and power assets to Arcelor Mittal Nippon Steel (AM/NS).

EPG’s Salaya Power Project is a 1,200 MW (2×600 MW) imported coal-based thermal power plant located in Jamnagar district of Gujarat.

According to the company’s website, it has a 25-year Power Purchase Agreement (PPA) with GUVNL (Gujarat Urja Vikas Nigam), which means the plant is responsible for supplying about 10% of the state’s electricity consumption.

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