Adani Power, a prominent private thermal power producer in India, has enhanced its offer to ₹4,100 crore for the lenders of Lanco Amarkantak Power, a thermal power company currently undergoing insolvency proceedings, according to sources familiar with the matter reported by the Economic Times.
In a report on November 02, ET mentioned that Adani Power had initially offered ₹3,650 crore. The unsolicited offers came almost 10–11 months after a plan led by the Power Finance Corp. (PFC)-led consortium, with 95% lender approval.
Sources revealed to the Economic Times, “This marks the second improved offer by Adani Power in just six weeks, indicating a strong commitment to convincing lenders to sell the distressed power company to them.”
While Adani Power did not respond to ET’s request for comment, the report noted, “Adani Power stands a chance as the National Company Law Tribunal (NCLT) has not endorsed the PFC-led consortium’s ₹3,020 crore resolution plan.”
However, the challenge lies in the fact that two debtholders are part of the winning bidder’s consortium. PFC and REC, both holding 41% of the debt in Lanco Amarkantak, must provide consent for Adani’s bid to proceed.
The Insolvency and Bankruptcy Code (IBC) doesn’t prevent debtholders from bidding for a company. A bid can be blocked by anyone holding over 34% of the debt, whereas approval requires the agreement of 66% of lenders, as reported by ET.
Adani Power’s stock has seen a significant surge, gaining 21.21% in the past week and an impressive 44.60% over the last three months. Since its low point in February 2023 at ₹132.40 per share, the stock has more than doubled investor wealth, delivering a remarkable return of 303%.
In terms of financials, the company reported a substantial 848% YoY increase in consolidated net profit to ₹6,594 crore in Q2 FY24. This growth is attributed to improved EBITDA, higher one-time income, and the recognition of deferred tax assets.
Consolidated revenue from operations also saw a robust YoY increase of 61%, reaching ₹12,155 crore from ₹7,534 crore in Q2 FY23. The company earned a tax credit of ₹1,371 crore in the quarter, a significant shift from a tax expense of ₹139 crore YoY.
During Q2 FY24, the company and its subsidiaries achieved an average Plant Load Factor (“PLF”) of 58.3% and a power sales volume of 18.1 billion units (“BU”), compared to a PLF of 39.2% and a power sales volume of 11 BU in Q2 FY 2022–23.
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