Jindal Steel and Power (JSPL) has acquired bankrupt Monnet Power for ₹410 crore at an auction held last month, said two people aware of the development.
Adani Power and J Kumar Infraprojects were also in the fray to acquire the distressed thermal power company, one of the persons cited above said.
Naveen Jindal-promoted JSPL acquired Monnet Power for a captive purpose. The 1,050 MW Monnet Power plant is located next to JSPL’s Angul steel plant in Odisha, making the acquisition synergistic, the people cited above said.
The winning bidder will need to invest at least about ₹1,000 crore to operationalise the plant, the first person said.
The liquidator had admitted claims of ₹8,610 crore, of which ₹7,426 crore were from financial creditors.
After a string of unsuccessful auctions over the last two years, the liquidator sold the company last month. JSPL bid at ₹410 crore as against a reserve price of ₹400 crore. In the first round of the auction in July 2020, the liquidator had set a reserve price of ₹859.5 crore.
This is the second acquisition of a thermal power company by Jindal Steel and Power for captive use. It acquired Simhapuri Energy, a 600 MW power unit operating on imported coal, for ₹300 crore.
In May, Vedanta acquired Athena Chhattisgarh Power for ₹565 crore under a liquidation process for captive use. Athena has two partially complete power units of 600 MW each.
Monnet Power was admitted for corporate insolvency proceedings in February 2018 but lenders failed to get attractive offers.
Under corporate insolvency, JSW Energy had offered staggered payment of ₹500 crore, which included payment to lenders, employees, and trade creditors. The majority of lenders rejected the offer, following which the bankruptcy court ordered liquidation in October 2019.
It was among the second list of 28 companies that the Reserve Bank of India directed banks to refer to the National Company Law Tribunal by December 2017 is a resolution plan is not in place by 13 December 2017.