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Another feather in PFC cap: NTPC acquires Jhabua Power Limited

By IndianMandarins- 07 Sep 2022
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New Delhi (07.09.2022): Power Finance Corporation Limited (PFC) has successfully resolved yet another stressed project, the 600 MW Thermal Power Project of Jhabua Power Ltd., (JPL) in the Seoni district of Madhya Pradesh
NTPC Ltd, India’s largest integrated power producer successfully acquired JPL through Corporate Insolvency Resolution Process initiated by National Company Law Tribunal, Kolkata, (NCLT).
PFC is the largest lender to the project, which also has REC, SBI, Axis Bank, Bank of India, LIC, PNB, UCO Bank and Union Bank of India among its lenders.
The ownership of the project was transferred to a consortium of NTPC Ltd., PFC, REC and other lenders on September 5 in the presence of Gurdeep Singh (CMD, NTPC), Ravinder Singh Dhillon (CMD, PFC), Parminder Chopra (Director- Finance, PFC), Manoj Sharma (Director- Commercial, PFC), Ramesh Babu V (Director- Operations, NTPC), Chandan Kumar Mondol (Director- Commercial, NTPC) and Abhilash Lal, the Resolution Professional (RP).
It is the first acquisition of a power asset by NTPC through the NCLT route, a step forward in accomplishing NTPC’s long-term capacity targets.
The transaction is uniquely placed, with the participation of NTPC, the largest power generating company in India and also in terms of lenders being offered matching equity stake in the project, in addition to the debt instruments and upfront payment received by them.
Commenting on the transaction, Ravinder Singh Dhillon, CMD, PFC said that this is another step forward in PFC’s stressed asset resolution efforts. At the end of Q1 FY 2022-23, PFC’s net NPA ratio stood at 1.73 per cent, the lowest level in the past 6 years and is likely to fall further with the resolution of the Jhabua project.
The JPL has an operational thermal power capacity of 1 x 600 MW and now post-acquisition, NTPC has become a 70+ GW company with a total installed capacity of 70,064 MW.

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