India’s two largest corporations Adani Group and Reliance Industries, which were about to clash in the auction of Lanco units, did not participate in the third round of bidding on Wednesday. The auction for insolvent Lanco Amarkantak Power has invited three resolution applicants – Adani Power, Reliance Industries and the Power Finance Corporation-REC team – to bid in the auction.
The two firms told Lanco’s resolution specialist that the proposed “challenge mechanism” violated the rules governing the Insolvency and Bankruptcy Code (IBC). According to an Economic Times report, both the corporate houses said there is no such provision in the current legislation.
A third bidder, the Power Finance Corporation-REC team, offered Rs 3020 crore as a cash payment on Wednesday. The PFC-REC combination also holds 41% of the debt in Lanco Amarkantak, giving it a bigger say in the resolution process.
In the second round of bidding, Adani Group gave the highest bid of Rs 2,950 crore on an upfront payment. While Reliance Industries submitted an offer of Rs 2,000 crore under the upfront payment plan, the PFC-REC pairing offered Rs 3,870 crore over the next 10-12 years.
RIL and Adani Group will also compete to own Future Retail and SKS Power. Expressions of interest have already been submitted for these two companies.
Lanco operates thermal power generation schemes in Chhattisgarh. The first phase of the block on the Korba Champa State Highway has been commissioned and the second phase is under construction.
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