The commerce ministry has deferred a decision on allowing Adani Power to transfer its Mundra power plant to a subsidiary and sought a no-objection certificate from the project’s lenders to consider the proposal. The board of approval (BoA) on special economic zones postponed the decision after noticing that the proposed transfer of the thermal power plant was being done without the transfer of the liability of debt, a commerce ministry official said.
The board’s approval is required for the transaction as the thermal power plant is located within an SEZ. “BoA of SEZ has deferred the decision with a query,” Adani Power said in a statement. “In its meeting held on July 3, it has decided to defer the proposal of approving the demerger until (a) no-objection certificate is received from the banks. We have approached lenders and once approval is granted, we will take the process forward as required.
The NOC from the banks would be taken through a meeting conveyed as per the directions of National Company Law Tribunal (NCLT).”
Adani Power’s board had last month approved the demerger of the 4620-mw plant to a subsidiary, Adani Power (Mundra) Ltd, with associated assets and liabilities, including bank loans.
The transaction is subject to necessary approval and consent, such as from stock exchanges, lenders, shareholders and the NCLT, the company statement said.
The income of the Mundra power generating business undertaking in fiscal 2017 was .`11,017.97 crore, about 93% of the total income of Adani Power during that year.
Adani Power and rival Tata Power have both offered majority stakes in plants running on imported coal in Gujarat to the state government. In separate letters to Gujarat Urja Vikas Nigam, the companies offered a 51% stake in their respective plants for Rs 1 each. They will retain balance shares.
Tata Power operates the 4,000-mw Mundra ultra mega power project that has supply pacts with five states. Essar Power, too, has offered its 1,320-mw Salaya plant to Gujarat post an adverse ruling on April 11 by the Supreme Court. The apex court said increase in coal prices due to a change in overseas laws cannot be considered to amend power purchase agreements.