Vedanta Gets NCLT Approval To Acquire Meenakshi Energy; Details Here

Multinational mining company Vedanta’s bid gets a nod from Hyderabad National Company Law Tribunal (NCLT) to acquire Meenakshi Energy through the insolvency resolution process.

Anil Aggarwal-led Vedanta offered Rs 1,440 crore against admitted claims of Rs 4,625 crore, equating to a 31% recovery, distributed among lenders, trade creditors and employees, according to a report by The Economic Times.

Also read: Adani Power Shares Rises 3% After US Investment Firm GQG Partner Picks Up 8.1% Stake

Court documents show that Jindal Power and  a consortium of Prudent Asset Reconstruction Company with Vizag Minerals – are the two other bidders in the fray to acquire the thermal plant.

An earlier report by ET revealed that the government-promoted  National Asset Reconstruction Company had offered Rs 1,003 crore to acquire lenders' debt. However, lenders declined to offer as Vedanta’s offer was higher.

Vedanta's resolution plan is approved by a majority of 94.96% of the committee of creditors (CoC), according to an order uploaded by the bankruptcy court, as quoted by ET. 

The court data further showed that Vedanta had submitted an improved offer between Rs 650 crore to Rs 1,440 crore. However, bidders did not immediately approve Vedanta’s offer and decided to give other bidders an equal opportunity to submit an improved offer.

On December 29, they decided to run a challenge process, wherein Vedanta emerged as the highest bidder, according to an ET report. 

Of the Rs 1,440 crore offer, lenders will receive Rs 1,143 crore against their admitted claims of Rs 3,778 crore, implying a recovery of 30%. Vedanta will make an upfront payment of Rs 312 crore and the balance will be staggered over 5-7 years.

Also read: Govt Plans Stake Sale In Indian Railways Funding Arm IRFC Via Offer For Sale: Report

According to stock exchange disclosures, India Power Corporation (IPCL) provided guarantee for Meenakshi Energy, which is part-owned by Aksara Commercial. In February 2016, Srei promoter Hemant Kanoria announced the acquisition of Meenakshi Energy from Engie Group of France for $1.

Meenakshi Energy's project cost is estimated at ₹7,583 crore, which includes debt of ₹3,473 crore and an equity contribution of ₹4,110 crore, according to the information memorandum circulated by the resolution professional, as cited by ET.