Under NTPC, SKS Power's idle plant begins operating again

11 Jul 2022 , 09:40 AM

SKS Power Generation, which is situated in Chhattisgarh, is the first inactive power plant to begin operating as a result of a decision from the federal government. According to news reports, the plant will be run and maintained by the state-owned National Thermal Power Corp (NTPC) until the principal lender Bank of Baroda (BoB) finds a buyer.

Since April 2022, the company has been going through corporate insolvency and resolution procedure (CIRP), and it owes Rs1,890 crore to lenders led by BoB.

The factory’s output ceased earlier this year after its Hong Kong-listed owner Agritrade Resources was unable to maintain it due to its own financial issues. As part of a one-time settlement with a group of lenders headed by the State Bank of India, Agritrade itself has purchased the plant in 2019. (SBI).

The government first chose SKS and the 1000 MW Meenakshi Energy plant in Andhra Pradesh as the two stressed plants that needed to be restarted in order to alleviate the worst summer shortages. Meenakshi is reliant on imported coal, unlike SKS.

Bankers are simultaneously using the CIRP to identify a buyer for SKS and will start asking for expressions of interest from potential purchasers on Tuesday. The transaction’s only process advisor is BoB Capital Markets.

Bankers anticipate receiving greater appraisals for their obligations if the facility is operating and all agreements are in place.