Resurgent Power Ventures Pvt Ltd (Resurgent Power) has completed the acquisition of South East UP Power Transmission Company Ltd (SEUPPTCL) and has settled the debt of all existing creditors as per the terms of the Resolution Plan.
The development is pursuant to the letter of intent issued by the Resolution Professional of SEUPPTCL, and approval of the Resolution Plan by National Company Law Tribunal (NCLT), Allahabad vide order dated June15, 2022,
The transaction was part of a stressed asset resolution process run by Resolution Professional under the supervision of its Committee of Creditors through a competitive bidding process under the Insolvency and Bankruptcy Code, 2016.
Intrastate scheme
SEUPPTCL was incorporated as a special purpose vehicle formed by UP Power Transmission Company Ltd (UPPTCL) on September 11, 2009 to implement and operate the specified intra-state transmission system for a period of 35 years under the PPP model on Build-Own-Operate-Maintain & Transfer (BOOT) basis. Pursuant to implementation of the Resolution Plan, SEUPPTCL has now become a wholly-owned subsidiary of Resurgent Power.
SEUPPTCL has approx. 1,500 km of transmission Line (765kV and 400kV) and five substations of 765kV and 400kV rating. Total scope of the project was divided into two groups:
- Group 1 consisting of transmission lines of length about 600 km (765kV and 400kV) and two substations (765kV and 400kV). This group is already operational since July 2017.
- Group 2 consisting of transmission lines of length of about 900 km (765kV and 400kV) and three substations of 400kV. This group is under construction.
The transaction
The transaction entailed payment for one-time settlement of outstanding debt and purchase of equity shares for a total consideration of Rs.3,251 crore and payout of existing cash balance of SEUPPTCL as outlined in the Resolution Plan. In addition, Resurgent Power will invest equity and raise debt in SEUPPTCL for completion of Group 2. When completed, the total enterprise value will be approximately Rs.6,500 crore. The transaction has been funded through a mix of shareholder funds brought in by Resurgent Power and loans drawn down from State Bank of India.
Resurgent Power portfolio
Apart from the newly-acquired SEUPPTCL, Resurgent Power owns 75.01 per cent stake in Prayagraj Power Generation Company Ltd, which owns and operates a 1,980-mw supercritical power plant in Uttar Pradesh. In addition, Resurgent Power also owns 100 per cent stake in NRSS XXXVI Transmission Ltd, which is commissioning a critical interstate transmission project for System Strengthening Scheme in Northern Region.
Adding value to portfolio
Speaking on the development, Dr. Praveer Sinha, CEO & MD, Tata Power said “In line with our aspiration to expand our transmission business, Tata Power has partnered with ICICI and other global investors in Resurgent Power, that had bid for acquiring SEUPPTCL under Corporate Insolvency Resolution Process. We are delighted to have completed the acquisition, allowing all creditors to maximize the recovery from this project. This asset fits our overall strategy to maximize shareholder value through growth & sound investments. After successful turnaround of Prayagraj Power and acquisition of NRSS XXXVI, this asset will add further value to and diversify the Resurgent Power portfolio.”
Ownership of Resurgent Power
Resurgent Power is a joint venture based out of Singapore co-sponsored by Tata Power and ICICI Venture and has other global reputed institutions as investors. It was set up to acquire stressed assets in the Indian Power Sector. Tata Power International Pte. Ltd (TPIPL) (a wholly owned subsidiary of Tata Power), owns 26 per cent stake in Resurgent Power. ICICI Bank owns 10 per cent stake in Resurgent Power and the balance 64 per cent is held by other global investors including Kuwait Investment Authority.
Featured photograph is for representation only
