Tatas, JSW in race to buy Prayagraj Power

MUMBAI: Tata Power and JSW Energy are battling to acquire a 1,980MW, coal-fired electricity-generating unit in north India as the two look to ramp up their capacities. Both have offered an upfront payment of over Rs 6,000 crore and an equity stake to the lenders of Prayagraj Power Generation Company, who now own 89 per cent stake of the company. The lenders took controlling stake in Prayagraj after invoking the RBI’s strategic debt restructuring (SDR) norms that allow conversion of loans into equity. Prayagraj, earlier promoted by Jaiprakash Associates, owes over Rs 11,000 crore to lenders. Jaiprakash Associates now holds just 11 per cent stake in Prayagraj, whose 1,980MW unit is located in Allahabad, Uttar Pradesh. Tata Power declined to comment on the report, while JSW Energy didn’t respond to the query. The N Chandrasekaran-chaired Tata conglomerate and the Sajjan Jindal-controlled JSW Group have been competing against each other to purchase financially-stressed steel and energy assets as both increase their focus in the world’s fourth-largest economy. Besides Prayagraj, Tata and JSW are in the race to acquire Bhushan Power & Steel. There isn’t a significant difference between the offers made by Tata Power and JSW Energy, people familiar with the matter said. Tata Power has offered a 15 per cent stake to the lenders of Prayagraj, while JSW Energy has offered a lesser equity, the people said. Tata Power is the country’s largest integrated electricity generation company with a 10,757MW capacity, while JSW Energy has a capacity of 6,086MW with plans to expand it to 10,000MW. The attractive features for the contenders is the 25-year power purchase agreement Prayagraj has with five distribution utilities in Uttar Pradesh for the sale of 90 per cent of the electricity generated from the unit, a fuel supply arrangement with Northern Coalfields and the option to set up an additional 1,320MW capacity at the same site.

from The Economic Times https://ift.tt/2MtEftH