Banks want India Power to improve offer on Abhijeet group co.

NAGPUR: Once again it is uncertain whether the banks will be able to find a strategic investor for Corporate Power Ltd (CPL), a company under city-based Abhijeet Group. The consortium of close to a dozen banks that has lent this company is now looking for an investor for taking over the business to get its Rs 4,800 crore bad loan account back on track. CPL has plans to come up with power plants in Jharkhand.

The banks had an offer by India Power that called for infusion of fresh credit of around Rs 3,000 crore and at the same time the existing debt had to be written off by close to Rs 1,000 crore. Based on the proposal, global bids were floated to see if there could be a better deal than this. However, even as power majors like Tata Group, BHEL, and NTPC had purchased pre-bid documents, none actually took part in the tendering process.

With no response, a meeting to discuss the India Power proposal was held last week. It was pointed that the deal in its present form would not be workable. With the fresh credit, the total exposure of banks in this company alone would be nearly Rs 7,000 crore at a time when other companies of the Group also were faltering on their loans.

Sources privy to the affairs said the bankers want both, the loan to be written off and fresh credited requirement, to be brought down. "Though the exact amount has not been determined, it was pointed out in the meeting that both the amounts will have to be reduced to make it feasible for the banks. The banks cannot waive off as much as Rs 1,000 crore. The matter will be taken up in the next meeting," the source said.

A spokesperson of India Power reverted with a SMS that the company would not be in a position to comment on the issue at present. However, for the bankers hoping to revive this account the recent development had pushed back the process.

In line with CPL, there were initial talks with steel maker Uttam Galva for investing in Corporate Ispat Alloys, also an Abhijeet Group company. Like the offer by India Power, CIAL deal is also in the primary stage. With no further development seen, bankers are planning to start the process of valuing the assets so that action under the Securitization Act could be taken. Apart from this, the corporate debt restructuring (CDR) for Abhijeet Mihan Nagpur Energy ltd (AMNEPL), the company formed for setting up a dedicated power plant for Mihan-SEZ has also failed as the plant could not be fully operated. The company sources said it might soon become a non-performing asset (NPA) too.

Source : timesofindia.indiatimes.com