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M&A Sell Side

Lenders of SKS Power Generation (Chhattisgarh) Limited

Sell Side Advisor

2019

Details of the Transaction (Including unique traits, if any)

SKS Power Generation (Chhattisgarh) Limited (SPGCL) has developed and is operating a 600 MW (2 X300 MW) coal based thermal power plant pursuant to an  Implementation Agreement entered into with Government of Chhattisgarh and Chhattisgarh State Power Holding Company Limited, at village Binjkote & Durramuda, Raigarh, in the State of Chhattisgarh, India. The lenders of SPGCL had initiated bid process for identifying an investor for affecting sale of shareholding of the lenders in SPGCL. Agritrade Resources Limited (Agritrade) was identified as investor to take over the ownership in SPGCL.  Agritrade acquired SPGCL through an Indian entity, Entwickeln India Energy Pvt Ltd. The entity is a non-operational Special Purpose Vehicle (SPV) and would act as the holding entity for the target.

 

Uniqueness of the Deal:

  • This transaction was the first successful sale of power asset pursuant to the release of the February 12th Circular
  • Considering that the relative valuations in the industry are around Rs. 3.00 Crore, Lenders were able to secure an attractive valuation of Rs. 3.62 Crore per MW for the stressed power project. The entire consideration was received upfront in the all-cash deal.
  • Agritrade Resources Ltd, headquartered in Singapore and listed in Hong Kong Stock Exchange, is an energy solutions provider, handling coal, renewables and providing shipping solutions.
  • Attracting global investor was a challenge considering the current industry scenario, where there are uncertainties in PPA tie up, coal availability and regulatory framework.

 

Key Learning

  1. Designing and Running a Time Bound Bid Process
  2. Various steps involved in the resolution process

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