Vedanta, Jindal Power lead six-company bid for Athena

2 Aug 2024 , 12:52 PM

According to news reports, six businesses are vying for control of Athena Demwe Power—which owns the 1,750 MW Lower Demwe hydropower plant in Arunachal Pradesh—through the insolvency resolution process.

These businesses include Vedanta, Jindal Power, and a division of JSW Energy. The other bidders, according to the reports, are Orissa Metaliks, THDC India, which is owned by the state-owned NTPC, and Greenko Energies.

In accordance to one of the reports, “These companies have been recognized as prospective resolution applicants (PRAs) thus far.” “The eligibility of the PRAs has to be checked based on eligibility criteria as fixed by the CoC (committee of creditors),” said the report.

There is a strong belief that the Lower Demwe project on the Lohit River is strategically and nationally significant. Delays resulted from unfinished forest clearing, even though environmental permission was given in 2010.

Up until press time on Thursday, the six potential resolution seekers’ email inquiries to Athena Demwe’s resolution professional (RP) went unanswered.

As of right now, the company has acknowledged liabilities exceeding ₹567 crore.

In 2017, Sikkim Power Investment Corporation’s revival plan was approved by the CoC after Athena Demwe was admitted for the insolvency resolution procedure. However, the resolution specialist and lenders claimed that the successful bidder had neglected to provide the necessary bank guarantee when the plan was brought before the National Company Law Tribunal (NCLT) for approval.

The tribunal extended the Corporate Insolvency Resolution Process (CIRP) period by 120 days in April and ordered the RP and lenders of Athena Demwe to invite new resolution options.

The order was contested by Sikkim Power Investment before the National Company Law Appellate Tribunal (NCLAT).

On July 26, the appellate panel rejected the case but gave Sikkim Power Investment two weeks to present a new revival plan for consideration by the Athena Demwe RP and CoC in addition to the other bids. According to legal experts, the resolution professional shares the information memorandum and request for resolution plan (RFRP) with the PRAs once they are deemed insolvent, and grants them access to the data room (if any).

Ashish Pyasi, partner at Aendri Legal, said, “Based on this information, the applicants will submit their plans which will be placed before the CoC for approval.”

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