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Supreme Court (Photo: Shutterstock)
The Supreme Court on Monday revived the insolvency resolution process against the 1,800-MW KSK Mahanadi project (KMP) by setting aside the Telangana High Court’s order that deferred the insolvency process.
Adani Power was the highest bidder for the stressed thermal project with an offer of Rs 27,000 crore, which ensured 92 per cent recovery for lenders.
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A Bench led by Chief Justice DY Chandrachud said that the High Court had neither the jurisdiction to defer the insolvency process nor to ask for the consolidation of insolvency proceedings of the thermal power company and its two subsidiaries—KSK Water Infrastructure and Raigarh Champa Rail Infrastructure.
The court allowed the appeal of the Committee of Creditors of KSK Mahanadi Power Company, stating that the High Court had passed the order without issuing notice to other parties. The High Court order had come on a petition filed by Uttar Pradesh Power Corporation.
KSK Mahanadi Power Company had a 3,600 MW coal-based power project in Chhattisgarh. Currently, it has three operational units of 600 MW each, while the rest of its units are in various stages of construction.
The lenders have made claims of Rs 29,330 crore against KSK Mahanadi, which was sent for debt resolution in 2020 after the firm defaulted on its debt payments.
Several banks, including the State Bank of India (SBI), have sold their loans to asset reconstruction companies (ARCs) to recover part of their dues. KSK Mahanadi had power purchase agreements with Andhra Pradesh, Tamil Nadu, and Uttar Pradesh but defaulted on loans due to lack of coal supply. The company was allotted two coal blocks in Chhattisgarh, but in 2014, following a Supreme Court judgement, the allocation was cancelled. Later, the plant received coal linkage under the “Shakti” scheme of the power ministry but had to import coal due to a shortfall.
SBI tried to resolve the project under its flagship scheme SAMADHAN, which was aimed at resolving stressed assets outside the National Company Law Tribunal (NCLT). However, due to reluctance of other lenders and lack of buyers, the process under this scheme was halted, and the project was moved to the bankruptcy court.
KMP had also received plans from other interested parties, including Capri Global, government-owned NTPC, Coal India, JSW Energy, Jindal Steel and Power, and Vedanta, among others.
First Published: Oct 14 2024 | 8:58 PM IST
