The National Company Law Tribunal (NCLT) in Hyderabad has approved JSW Energy's resolution plan to acquire the bankrupt KSK Mahanadi Power Company under its Corporate Insolvency Resolution Process. The approved plan amounts to Rs 160.84 billion, which will be used to settle the company's debts. The creditors of KSK Mahanadi, whose total admitted claims exceed Rs 260.94 billion, will receive Rs 160.84 billion as part of the resolution.

As per the plan, Rs 159.85 billion will be paid upfront in cash to KSK Mahanadi's financial creditors, which constitutes almost 50 per cent of the total claims. The major creditors involved include Aditya Birla ARC, Prudent ARC, Power Finance Corporation, and Rural Electrification Corporation, among others.

To fund the acquisition, JSW Energy will raise Rs 130 billion through debt and Rs 30.84 billion in quasi-equity. The acquisition will be executed through a bid company identified by JSW Energy, which will then be merged with KSK Mahanadi as per the terms of the resolution plan.

KSK Mahanadi was admitted into the Corporate Insolvency Resolution Process on October 3, 2019, following a petition filed by Power Finance Corporation. This acquisition represents a significant step toward resolving the financial challenges faced by KSK Mahanadi while enabling JSW Energy to expand its power sector portfolio.

News source: The Hindu