Published On:March 23 2017
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Coal power projects on takeover radar in Odisha.
Some of the coal-fired power plants in Odisha which have commenced commercial operations or are at very advanced stages of commissioning are up for grabs. Companies looking to augment power capacities through the inorganic route are eyeing these assets in Odisha.
JSW Energy, part of the Sajjan Jindal-led JSW Group, is believed to be in the race for buying out the thermal power assets of Monnet Power and Jindal India Thermal Power Ltd. (JITPL) in Odisha. Monnet Power’s 1,050 MW coal-based power plant near Angul was in advanced stage of commissioning. Monnet Power’s parent company, Monnet Ispat & Energy had won the Mandakini coal block in Odisha in competitive bidding, it surrendered the block later on grounds of economic unviability. Monnet Power had accumulated debt in excess of Rs. 5,000 crore.
Though lenders had earlier denied a haircut in JSW Energy’s prospective deal to acquire majority equity in Monnet Power, the Sajjan Jindal-owned firm is still believed to be in the hunt for the asset.
Besides Monnet Power, JSW Energy is also eyeing takeover of BC Jindal controlled JITPL’s 1,200 MW coal-based plant at Derang near Angul. The first unit (600 MW) of the 1200 MW plant had begun commercial operations and started power supplies to the Odisha grid. But, coal paucity and absence of firm linkages had caused disruptions in the operations of the power plant. This project has been completed at a cost of s 7537 crore which includes a debt component of Rs 5900 crore. JITPL has power purchase agreements (PPAs) with Odisha’s Gridco Ltd, Kerala State Electricity Board and Tata Power Trading Corporation. Apart from JSW Energy, JITPL also had competing offers from Adani Power and Singapore’s SembCorp. The valuation of the prospective deal is not known.
JSW Energy refused a comment on the status of its takeover plans of Monnet Power and JITPL. An e-mail questionnaire sent to the company remained unanswered.
NLC India (formerly Neyveli Lignite Corporation) which is in the hunt for buying out power assets, is understood to have shown interest in the 700 Mw Odisha plant of Hyderabad-based Ind-Barath Power Infra Ltd (IBPIL). The power plant located at Sahajbahal, near Jharsuguda, has commenced commercial operations. Though the exact size of the potential deal is not known, the valuation could be anywhere in the range of Rs. 5000-5500 crore.
When asked, the source at IBPIL said, “As of now, there are no such plans to sell off the Odisha asset. We are now focusing on stepping up the generation of the plant. At the same time, we can evaluate opportunities as and when they come.”
In August last year, NLC India had floated an Expression of Interest (EoI) from companies owning coal and lignite-based power projects, for a possible acquisition. NLC India’s installed thermal power capacity is 3240 MW. It runs a 10 MW solar power unit and wind power assets with a capacity totalling 37.5 MW.