JSW Energy Expects Higher Returns After CoC Approves Resolution Plan For Ind-Barath
Smoke rises from a chimney at a thermal power station in India. (Photographer: Dhiraj Singh/Bloomberg)

JSW Energy Expects Higher Returns After CoC Approves Resolution Plan For Ind-Barath

JSW Energy Ltd. is expecting higher return on equity after getting nod for its insolvency resolution plan for one of the two debt-laden power projects In Odisha whose assets it plans to acquire, according to its Joint Managing Director and Chief Executive Officer Prashant Jain.

“Even if we are deploying less equity, that will be enhancing our returns on a normative basis,” Jain told BloombergQuint, adding that even a 3:1 debt-to-equity ratio will generate returns in the mid-teens. The deal will be ROE-accretive from day one for both projects, he said.

The power generation business of Sajjan Jindal-led JSW group on Monday said a committee of creditors overseeing the insolvency resolution of Ind-Barath Energy (Utkal) Ltd. has approved a resolution plan submitted by the company.

On Oct. 7, the company said it had entered into exclusive talks with GMR Energy Ltd. for buying out its thermal power plant GMR Kamalanga Energy Ltd. in Odisha.

Ind-Barath owns a 700-megawatt under-construction thermal power plant in Odisha, according to a report by Citi Research. JSW Energy did not disclose the financial details of its resolution plan on the exchange is it as bound by the confidentiality rules, but Jain said that the deal will generate normative returns once its contours are given shape. “With some of our assets, there could be a substantially higher potential on the upside.”

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