Sarda Energy Deposits Rs 1,950 Crore In Escrow Account As Part Of SKS Power Resolution
Earlier on Aug. 13, the Mumbai-based bench of the NCLT approved Sarda Energy and Mining's bid to acquire SKS Power Generation. The decision came after a complex set of actions.
Power lines (Source: Fré Sonneveld on Unsplash)
Sarda Energy & Minerals Ltd. deposited an infusion amount of Rs 1,950 crore in an Escrow account as per the terms of the resolution plan for debt-ridden SKS Power Generation Ltd.
The Chhattisgarh-based company informed the Management Committee of SKS Power Generation on Aug. 19 regarding the deposition of the amount in the Bank of Baroda account in an exchange filing on Tuesday.
Earlier on Aug. 13, the Mumbai-based bench of the National Company Law Tribunal approved Sarda Energy and Mining's bid and rejected other applications to acquire SKS Power Generation (Chhattisgarh). The decision came after a complex set of actions.
The resolution plan provides for payment of Rs 1,805 crore plus CIRP cost, IMC cost, surplus cash, margin money, litigation benefits and avoidance benefits, as the company had earlier notified in an exchange filing. The company will become a wholly owned subsidiary of Sarda Energy & Minerals.
Corporate Insolvency Resolution Process Of SKS Power Generation
The Corporate Insolvency Resolution Process was started against SKS Power Generation in April 2022 over the plea of Bank of Baroda, which had a total admitted claim of Rs 2,560 crore.
In October 2023, the NCLT remanded Sarda Energy & Minerals' resolution plan for reconsideration after objections were raised. Subsequently, the plan saw a setback after it was challenged before the National Company Law Appellate Tribunal. But in May 2024, the appellate tribunal overturned the NCLT's earlier decision, allowing the company to seek final approval and directing the lenders to revisit the resolution plan.
Many conglomerates had initially expressed interest in SKS Power but they did not submit the revised bids. The bidders included NTPC, Jindal Power, Torrent Power and Singapore-based Vantage Point Asset Management. Ultimately, SEML's resolution plan was voted on by the Committee of Creditors in favour of SKS Power Generation.
However, Torrent Power has moved the NCLAT against the approval of Sarda Energy and Mining's resolution plan for SKS Power Generation. Torrent Power had raised objections over the selection process, terming it to be discriminatory, and contended that it had proposed the highest upfront payment. The Torrent Group firm also sought a copy of the approved plan, which was rejected by the NCLT.
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