NEW DELHI: The National Company Law Tribunal (NCLT) has given a green light to JSW Energy‘s resolution plan for KSK Mahanadi Power Company under the Insolvency & Bankruptcy Code, which will result in an upfront cash recovery of around Rs 16,000 crore for financial creditors, which is around half their claim. Besides, the creditors will get a 26% stake in the company.
While the resolution process had started in 2019 the plan was finalised in Nov 2024 and submitted around a month ago. The NCLT bench, comprising members Rajiv Bharadwaj and Sanjay Puri, decided on the issue within a month, sending a strong signal that the tribunal is not sitting on proposals, especially where the amount involved is large. In fact, NCLT, IBBI and govt have been seeking to expedite cases.
While there were 10 resolution applicants vying for KSK Mahanadi, there were six – including Adani Power, Capri Global, Jindal Power, NTPC Vedanta and JSW – which participated in the challenge as the resolution professional sought to maximise the realisation for creditors. Aditya Birla Asset Reconstruction Company, Prudent ARC, Power Finance Corp and REC are the largest creditors to KSK Mahanadi. Power Finance Corporation had initiated the insolvency process against the company.
The admitted claims of creditors were to the tune of Rs 26,000 crore. JSW Energy has proposed to arrange Rs 13,000 crores debt and the remaining Rs.3,084 in the form of quasi-equity.
The cash realisation is significantly higher than the fair value of Rs 9,947 crore and Rs 6,849 crore liquidation value.
