Adani’s ‘Stress’ Buster: Group Wins Three Out Of Seven Stressed Assets In Power Sector Under Samadhan Scheme

Adani Group has emerged as the highest bidder to acquire three stressed power projects out of the seven that underwent resolution outside the insolvency code, reports Mint.

The group, headed by Gautam Adani, will acquire three firms - Coastal Energen Pvt Ltd, KSK Mahanadi Power Ltd (₹17,194 crore) and GMR Chhattisgarh Energy Ltd (₹8,174) - as part of the resolution plan approved by a group of Indian lenders, led by State Bank of India. Together, these companies which owe Rs 31,500 crore to the banking system.

The deal has been formulated under the Scheme of Asset Management and Debt Change Structure (Samadhan).

The scheme stipulates that a stressed power company’s debt be divided into sustainable and unsustainable segments. While the new owner takes the former, the latter is converted into equity.

A total of seven projects, with a cumulative debt of Rs 74,000 crore are being resolved through this route. Also, by resolving stressed assets outside of the Insolvency and Bankruptcy Code (IBC), it helps to prevent delays in deciding the cases.

New measures to relieve stress

In September 2018, the NDA government approved a series of measures like the auction of power supply contracts with attached coal suppliers, permitting coal usage for short-term power contracts and tweaking the payment mechanism to help power projects recover dues from state electricity distribution companies.

These measures will help release almost Rs 15,000 crore owed to private sector companies. These funds can later be used to make repayments on loans.

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