Five bidders express interest for 35% stake in Jaiprakash Power assets

Beena Parmar 

Moneycontrol News 

In a presentation with bankers, five bidders put in non-binding bids for Jaiprakash Power, sources told Moneycontrol.  “This was the first meeting and it was an expression of interest.”

Brookfield Asset Management, India Power Corporation, Resurgent Power, a joint venture between Tata Power and ICICI Ventures, JSW Energy in partnership with Piramal and Bain Capital assets have bid for about 35 percent equity stake in Jaiprakash Power’s assets, one of the persons directly involved with the development said.

The sustainable debt of the Noida-based power company is in the range of about Rs 4,000-5,000 crore and the bid by these players is to the tune of Rs 800-1,200 crore worth of equity value. This would also lead to change in management.

Additionally, Edelweiss Asset Reconstruction Company (ARC) too is in the race and has bid for the debt of the sustainable portion of the company.

Lenders are expecting Rs 10,000-odd crore for three assets, which are up for the sale, with the capacity of 2,200 mega watts of power capacity. Bina, Nigire and Vishnuprayag are the three assets up for sale.

The Joint Lenders’ Forum (JLF) of Jaiprakash Power has "appointed SBI Capital Markets Ltd and Ernst and Young LLP to assist in sale of minimum 30 percent equity stake held by the consortium lenders in the company to an investor (such that the new investor becomes the single largest shareholder in the company)."

The ICICI Bank-led group of 10 lenders had acquired 51.8 percent equity stake pursuant to the Strategic Debt Restructuring (SDR) process in February 2017.

SDR allow banks to convert part of defaulters’ debt to equity and take majority stakes. Lenders are then required to find new owners for those stakes. The buyer will become Jaiprakash Power Ventures Ltd’s single largest shareholder, said a document seeking bids by the company, in August.

Jaiprakash Power’s debt as on March 2017 stood at Rs 14,916 crore, according to the company’s annual report. However, the current debt is likely to be around Rs 11,000 crore.

Jaiprakash Power is in the business of power generation and has a presence in the power transmission business through its 74 percent-subsidiary Jaypee Powergrid, which has set up a 214-km transmission line.