Tata Power on September 30 said apex power tribunal APTEL has approved acquisition of 75 percent stake in stressed 1,980 MW Prayagraj power project by its joint venture's arm Renascent Power Ventures.
However, the company said, APTEL (Appellate Tribunal For Electricity) did not allow reduction of adopted power tariff of the project. Renascent Power Ventures had offered lower tariff in the power purchase agreements to consumers.
APTEL has upheld approval granted for transfer of 75.01 percent ownership of Prayagraj power project to Renascent Venture but without any reduction of adopted tariff, the company said in a statement.
Resurgent Power is a joint venture based out of Singapore, and is held 26 percent by Tata Power through its wholly-owned Singapore based subsidiary Tata Power International Pte. The balance 74 percent of Resurgent is held by ICICI Bank, Power Platform Ltd and Kuwait Investment Authority.
Prayagraj Power Generation Company Ltd (PPGCL) owns and operates a 1,980 MW (3X660 MW) coal based thermal power project in Uttar Pradesh and had become an NPA (bad loan) due to financial and operational stresses.
Resurgent Power had signed a share purchase agreement for acquiring 75.01 percent shares in PPGCL. The transaction was approved by the Competition Commission of India.
Resurgent was selected as the successful bidder in resolving this stressed asset and had signed a share purchase agreement with the lenders for acquisition of 75.01 percent shares of PPGCL.
Approval of the regulator was one of the pre-conditions for concluding this transaction.
Responding on this development, Praveer Sinha, CEO and MD of Tata Power said: "This judgment of APTEL is a positive development for power sector and specifically for resolution of stressed assets. The APTEL judgement protects economic viability of stressed assets post resolution, thus providing certainty for the bidders who wish to participate in the resolution process of stressed assets in the future".
With this development, Resurgent will look forward to concluding this transaction at the earliest, completing the takeover of Prayagraj project, stabilizing and improving operations of the plant to bridge the growing demand-supply gap of power in Uttar Pradesh.
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