RattanIndia Seeks Rs 500 Crore From Lenders To Restart Nashik Power Plant
RattanIndia Power Ltd. is looking to raise Rs 500 crore working capital from its existing lenders to resume operations of its 1,350 MW Sinnar thermal plant in Nashik, even as its creditors continue work on a resolution plan for the debt-laden company.
The company recently received a letter of intent from Maharashtra State Electricity Distribution Co. Ltd. for a 25-year power purchase agreement to supply 507 MW of power.
The power producer had last year restructured the debt of its 1,350 MW thermal plant in Amravati in Maharashtra by roping in Goldman Sachs and Varde Partners as equity investors. They took over Rs 4,050 crore debt from existing lenders that had pumped in Rs 6,574 crore into the project.
Commissioned in June 2017, the 1,350 MW Sinnar plant has five units of 270 MW each and is saddled with debt of around Rs 7,000 crore. The plant has been shut for the past two years. The management is keen to restart at least two units to meet the PPA.
"For the Amravati plant, where we managed to get one-time settlement offer, was operating efficiently. However, the Sinnar plant is shut due to various reasons. We are looking at a similar OTS model for Sinnar plant but to do that we need to make the plant operational,” RattanIndia Chairman Rajiv Rattan told Press Trust of India. "But we don't have the sufficient funds to restart the plant, therefore we are approaching our lenders for Rs 500 crore working capital.”
The lenders, including State Bank of India, Central Bank of India, Punjab National Bank, Rural Electrification Corporation Ltd. and Power Finance Corporation Ltd., have an exposure of Rs 7,000 crore to the Nashik plant.
"We need support from banks for a bank guarantee of Rs 200 crore to execute PPA with MSEDCL along with working capital of Rs 500 crore, which is essential for adding value to the asset," Rattan said. Sinnar plant has all clearances in place, including adequate water and coal linkages, he added.
"Once the PPA is signed, we can resume work," Rattan said. "If the plant is not operationalised, then there would be substantial erosion in the value of the asset, which will be against the interest of everyone, including the lenders.”
The Sinnar plant is located on a 1,069.35-acre plot in the Nashik SEZ and has coal allocation agreements with South Eastern Coalfields and Mahanadi Coalfields (for 5.226 mtpa).