Mumbai: Lenders to Jhabua Power Ltd may call fresh bids for the company after attempts to sell it to industrial gas manufacturer Goyal MG Gases Pvt. Ltd failed to make headway, three people aware of the development said. The company, a unit of Gautam Thapar-promoted Avantha Power and Infrastructure Ltd, was put on the block in the first week of May.

Mint reported on 29 August that Delhi-based Goyal MG Gases, a late entrant to the race, had offered 2,350 crore for Jhabua Power, outbidding rivals such as Adani Power, Tata Power-backed Resurgent Power Ventures Pte Ltd, Edelweiss Asset Reconstruction Co. (ARC) and Phoenix ARC.

The company had also furnished bank guarantees of 100 crore as stipulated by the lenders.

According to the people cited above, who spoke on condition of anonymity, the joint lenders forum (JLF) led by Axis Bank has now set an internal deadline of 30 November for Goyal Gases to make the final payment of 2,350 crore.

“There has been very little progress in the transaction in the last two months, but lenders are expected to meet representatives of Goyal Gases on 29 November again to see if there is a possibility of closing the deal," the first of the three people cited above said.

Lenders hold close to 61% of Jhabua Power’s pledged shares while the Avantha Group owns the rest.

In a related development, Avantha Group too has begun negotiations with the JLF to retain control of the unit. “Avantha has offered a tentative price higher than what Goyal Gases had offered," the first person said, adding, “However, Avantha is to yet to tie up the full funding."

A spokesperson for Axis Bank declined to comment citing client confidentiality, while emails sent to Goyal Gases and Avantha Group remained unanswered at press time.

Jhabua Power has 600 megawatt (MW) of operational thermal capacity at its plant in Madhya Pradesh with an additional 660MW under implementation. The plant has long-term power purchase agreements for 71% of its total generation, with Madhya Pradesh and Kerala buying 35% and 36% respectively. It has fuel linkage with Coal India Ltd. In 2014, Avantha Power sold its Korba power plant to Adani for 4,200 crore.

Jhabua Power is among a handful of distressed thermal power operators that have drawn significant buyer interest in a sector where a number of operators continue to face uncertainty due to nil or insufficient power purchase agreements, lack of fuel linkage and last-mile funding.

Other power sector accounts nearing resolution include Prayagraj Power Generation Co., SKS Power Generation (Chhattisgarh) Ltd, GMR Chhattisgarh Energy Ltd, Videocon Oil Ventures Ltd, GMR Rajahmundry Ltd, Jaiprakash Power Ventures Ltd, Bombay Rayon Fashions Ltd, Hindusthan National Glass and Industries Ltd and GTL Infrastructure Ltd. Resolutions for these accounts include debt recast, sale of assets and one-time settlements, Mint reported on 11 September.

The Supreme Court had in September granted interim relief to stressed power firms, directing lenders to maintain status quo on the Reserve Bank of India’s 12 February circular for banks to resolve these cases within 180 days or refer them for bankruptcy proceedings.

Several petitioners, including GMR Energy Ltd, RattanIndia Power Ltd, Association of Power Producers (APP), Independent Power Producers Association of India, Sugar Manufacturing Association from Tamil Nadu and a shipbuilding association from Gujarat, had intervened in the matter in different courts seeking relief.

On 27 August, the Allahabad high court denied relief to these power companies. Consequently, lenders identified around 20 out of 32 stressed assets to be referred to the National Company Law Tribunal. These assets include power projects such as Essar Power, Korba West Power Co. Ltd, Jindal India Thermal Ltd and Sravant Energy Pvt. Ltd

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