The resolution professional of South East UP Power Transmission Company Limited (SEUPTCL), has issued a Letter of Intent (LOI) selecting Resurgent Power Ventures Pte Ltd (Resurgent) as a successful resolution applicant under IBC proceedings, Tata Power said in a statement. This marks Resurgent's third acquisition since it was set up in 2016.
Resurgent is a private equity joint venture between Tata Power and ICICI Venture, in which Tata Power holds 26% through its wholly-owned Singapore based subsidiary Tata Power International Pte Ltd. The balance 74% is held by ICICI Venture, the private equity arm of ICICI Bank, and other investors including Canadian pension fund CDPQ, Kuwait Investment Authority and State General Reserve Fund of Oman.
Singapore-based Resurgent Power was created in 2016 to invest in power projects.
The joint venture will invest equity and raise debt in SEUPTCL at a total enterprise value of more than Rs 6,000 crore to implement and commission the elements timely and turnaround the asset that will maximize value for all the stakeholders.
The transaction is part of a stressed asset resolution process initiated by a resolution professional through a competitive bidding process. It will be subject to the approvals including that of the National Company Law Tribunal (NCLT) under IBC process.
SEUPTCL was incorporated as a special purpose vehicle formed by UP Power Transmission Company Limited (UPPTCL) on September 11, 2009, to implement and operate the specified intra-state transmission system for a period of 35 years under public-private partnership model on Build-Own-Operate-Maintain & Transfer (BOOT) basis.
The company's financial troubles triggered due to the bankruptcy of its Spanish owner Isolux Corsan. As on August 2021, its dues listed under bankruptcy process stood at Rs 5970 crore, of which around Rs 4,400 crore were admitted by the NCLT.
SEUPTCL has around 1500 km of transmission line and is divided into two groups. The Group-1 consists of six transmission element totalling 582 km of transmission lines (765 KV and 400 KV) and two 400 KV substation with a combined capacity of 1,630 MVA.
Group- 2 comprises eight transmission element totalling 953 km of transmission lines (765 KV and 400 KV) and three 400 KV substation with a combined capacity of 4,100 MVA.
“Tata Power partnering with investors in Resurgent Power had bid for acquiring SEUPTCL and is delighted to have been selected as the successful bidder by the Resolution Professional for acquiring the project under IBC proceedings. This asset will bring significant value to our transmission business and diversify the Resurgent Power portfolio after the successful turnaround of the 1980 MW Prayagraj Power Plant and acquisition of System Strengthening Scheme in Northern Region NRSS XXXVI Transmission Limited," said Praveer Sinha, CEO & MD, Tata Power.
In November last year, Resurgent was selected as the successful bidder by PTC India Financial Services Ltd for the acquisition of financially troubled NRSS XXXVI Transmission Project, a power transmission project spread across three states of Haryana, Rajasthan and Uttarakhand. The transaction was also a part of stressed power asset resolution process through a competitive bidding process. Under the plan, Resurgent committed to invest equity and raise debt in NRSS XXXVI at a total enterprise value of approximately Rs 470 crore to implement and commission the projects.
Resurgent, a private fund size of $843 million, was set up to provide financial support to stressed power projects, primarily coal-fired and hydro power assets in India that are either in advanced stages of construction, partially or fully operational.