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Banks, led by PNB, look to sell stake in Jindal India Thermal Power

LiveMint logoLiveMint 28-08-2017 Alekh Archana

Mumbai: Lenders to Jindal India Thermal Power Ltd (JITPL), led by consortium leader Punjab National Bank, have sought bids from interested investors to sell their 51% stake in the company.

The B.C. Jindal Group company, which has set up a 1,200 megawatt (MW) thermal power plant in Angul district of Odisha, owes more than Rs5,900 crore to a clutch of 17 lenders, according to a tender document available on the website of SBI Capital Markets Ltd, which has been named transaction adviser. A security trustee to lenders holds 51% in the unlisted JITPL after invocation of pledged shares after the company showed troubles in loan repayment.

However, currently the account is standard, which means the company is servicing debt on time, a person aware of the matter said, declining to be named.

“The lenders now propose to sell these shares along with management control in JITPL,” according to the tender document.

The debt on the balance sheet of the company can be refinanced based on discussion and proposals submitted by the prospective investors, it added.

Like most companies in the sector, lack of availability of coal and higher interest costs are the key reasons for JITPL’s financial stress.

Both power units were closed since start of May because of shortage of coal supply, according to a 28 May, 2017 report of The New Indian Express.

The company has set up two coal-based thermal power plants, of 600MW each in Angul district of Odisha. The cost of the project was a little over Rs7,000 crore, funded with a debt to equity ratio of 75:25.

The company has executed a 744 MW long-term power purchase agreement, according to the tender. Part of the supply has started while the rest is scheduled for October and December.

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