SKS Power’s losing bidders challenge lenders’ decision

SKS Power’s losing bidders challenge lenders’ decision

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Mumbai: Sarda Energy & Minerals’ acquisition of the bankrupt SKS Power Generation has hit a bump with both Torrent Power and Vantage Point Asset Management appealing against the bankers’ decision in separate petitions. The losing bidders have alleged bias in the evaluation process and have sought the court’s direction to consider their plans afresh by providing another opportunity to offer better value.

Vantage Point has submitted that its offer for a higher amount than offered by Sarda was not considered by the resolution professional. Torrent has argued that the revised financial proposal of Sarda ought not to have been considered, as no revision could have been done or permitted. The company has said that it was not afforded equal opportunity to do so. Torrent and Vantage did not reply to separate emails seeking comment.

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Both the petitions challenging the decision of the committee of creditors (CoC) came even as the NCLT had reserved its order on Sarda’s takeover of SKS last month. After hearing these challenges, the two-judge bench of Prabhat Kumar and Kishore Vemulapalli directed the resolution professional Ashish Rathi to submit the relevant pages of CoC minutes detailing the decision-making process, the e-mail sent to resolution applicants to submit their plans and their reply to this communication. All parties have also been asked to be served copies of the documents which are not barred under confidentiality.
Nagpur-based Sarda Energy & Minerals was declared the winning bidder, pipping Torrent, Vantage and Delhi-based Jindal Power in a close fight. “Banks have recovered all their dues in a rare instance with operational creditors getting ₹200 crore. Sarda’s offer was higher by about ₹50 crore than the rest and though Vantage was close, it lost out on the evaluation matrix because it did not have any power sector experience,” said a person familiar with the process.

The bidding was close with less than one percentage point difference between the top four bidders. “Though Vantage’s offer was close, Sarda had promised to give all the proceeds from pending litigations amounting to ₹500 crore which also worked in its favour,” this person said.

SKS owes ₹1,890 crore to Bank of Baroda and State Bank of India (SBI). The plant is in high demand because its a rare working power plant available for sale. SKS also has 25 years of fuel agreement with South Eastern Coalfields, a Coal India unit, with a railway line directly transporting coal to the plant, which is a rare facility.

Bankers are, however, confident that the NCLT will vindicate their choice. “This is a late challenge, almost two months after the decision was made. In fact both parties have also taken back the ₹10 crore earnest money deposit (EMD) in July. The decision was taken after a thorough process. The courts have always supported the judgement of the CoC and even this time it will be the case,” said a second person aware of the process.

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