EoI for KSK Energy’s Mahanadi project expected in month’s time

A consortium of 27 lenders had time till October 17 to file their financial claims with NCLT

Power Finance Corporation, KSK Energy, Chhattisgarh, KSK Mahanadi, Andhra Pradesh, Tamil Nadu, Gujarat, Uttar Pradesh

The Power Finance Corporation (PFC), the lead lender to the KSK Energy’s project in Chhattisgarh, expects an early resolution. The project has a capacity of 3,600 MW. The National Company Law Tribunal (NCLT) has accepted PFC’s petition to resolve the case under bankruptcy proceedings.

The expression of interest (EOI) is expected to be invited in a month’s time after all the lenders file their claims in NCLT. A consortium of 27 lenders had time till October 17 to file their financial claims with NCLT. A committee of creditors (CoC) will be constituted following the verification of claims.

On 3 October 2019, the Hyderabad bench of NCLT allowed PFC to start insolvency proceedings against the 3,600 MW power project of KSK Energy in Chhattisgarh. KSK Mahanadi has an operational generation capacity of 1,800 MW from three units of 600 MW, while the other 1,800 MW capacity was expected to come online in Phase-II.

However, issues related to coal availability and non-payment of dues by discoms led to deterioration of cash flows for the company, leading to default. At present, the project supplies power to distribution utilities in Andhra Pradesh, Tamil Nadu, Chhattisgarh, Gujarat and Uttar Pradesh. KSK Energy has a 25 year power purchase agreement with Uttar Pradesh.

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