Lenders for Lanco will vote on Adani Power's Rs 4,100-crore proposal

15 Dec 2023 , 02:18 PM

According to news reports, Lanco Amarkantak Power’s lenders are scheduled to cast a vote on whether to accept Adani Power’s Rs 4100 crore unsolicited bid. According to the reports, the resolution professional would petition to the National Company Law Tribunal (NCLT) to get guidance on the sale process if more than 66% of lenders support this idea.

Saurabh Kumar Tikmani, a resolution professional (RP) supported by KPMG, would also ask for guidance on whether to abandon the resolution plan for the distressed thermal power under corporate resolution that was headed by the Power Finance Corporation.

Two 300 mw units each make up the fully operational first phase of Lanco Amarkantak, while two 600 mw units make up the second phase, which is now under construction. Due to operations since the first phase, the company has Rs 1800 crore in cash.

For Lanco Amarkantak, the PFC-led consortium, Adani Power, and Reliance Industries were competing. At the December auction of last year, one of the three bidders was a consortium led by PFC. Adani and Reliance, who made offers of Rs 2,950 crore and Rs 2,103 crore, respectively, did not engage in the selling process and instead gave Rs 3020 crore.

A Rs 3,020 crore plan presented by a consortium led by PFC was approved by 95% of lenders in January of this year. The RP applied to the NCLT for approval of the PFC plan.

As reported by ET on November 2, Adani Power made an unsolicited enhanced offer of Rs 3,650 crore. Later, on December 13, ET reported that they had upgraded it to Rs 4,100 crore.

‘Since the NCLT has yet not approved the PFC-led consortium’s resolution plan, Adani Power stands good chance,’ the person in question stated.

According to the report mentioned above, RP will arrange an auction and ask all three bidders to participate if the court permits lenders to review Adani’s offer.

Bringing on PFC and REC, two lenders with a 41% share in debt, is Adani’s bigger problem.

The successful bidder includes both debtholders, who enjoy a 41% veto authority. It is not prohibited by the Insolvency and Bankruptcy Code (IBC) for debtholders to bid for a company. Anybody with more than 34% debt has the ability to thwart a resolution; on the other hand, a plan is accepted if 66% of lenders concur.

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