GVK In Talks With Deutsche Bank To Swap Debt Of Its Punjab Power Plant
GVK Group is in talks with Deutsche Bank AG to transfer the loans it took to fund its 540-megawatt coal-fired thermal power plant in Punjab, a person aware of the discussions said, requesting anonymity.
GVK Power (Goindwal Sahib) Ltd. was unable to run the power plant at optimal capacity in 2017-18 and 2018-19 due to low availability of fuel. As a result, the firm defaulted on repayment of dues to lenders, who classified the loans as non-performing asset.
If the deal goes through, Deutsche Bank will replace the banks as lender to the power plant. The German investment bank will have fresh terms of loan repayment with the GVK company once it clears the loans, the person cited above said. There will be no change in the equity shareholding of the company.
"The company will service the Deutsche Bank loan to clear the debt of senior lenders," this person said, adding the talks are in the initial stages. The total debt of the project currently stands at Rs 3,510 crore. the person added.
It is a one-time settlement to senior lenders and then there is an option of refinancing as well. The total amount that would be earmarked for settlement will depend on how much haircut the lenders are willing to take, the person added.
According to a statement issued by GVK at the end of the April-June quarter, lenders to GVK Power (Goindwal Sahib) Ltd. have approached National Company Law Tribunal for an appropriate resolution. However, the case is yet to be admitted, GVK had said.