Tata Power, Adani told to submit revised bids for UP Transco


and Adani Group have been told to submit revised bids for South East UP Power Transmission Company by the power transmission company’s lenders, people aware of the matter said.

Tata Power and Adani had submitted binding offers for the company in the second week of August alongside three other bidders – Power

of India, Sterlite and REC Power Development and Consultancy.

However, both of their offers were conditional on lenders securing reversal of a suspension order on a 1,600-km project the company is carrying out, imposed by the state power transmission authority for delays in completion.

Lenders are not agreeable to this condition, the sources said.

The suspension order only applies to a part of the project, they said. REC Power may also revise its offer, they said.

Tata Power and Adani declined to comment.REC Power did not respond to ET’s queries as of press time Sunday.

Lenders including

, Axis Bank, Power Finance Corporation and Corporation had wrested control of the transmission company from Spain’s Grupo Isolux Corsan after it defaulted on dues.

The Madrid-based company, which won a 35-year concession to build and operate a power transmission network in Uttar Pradesh, had taken loans of around Rs 3,700-crore from local lenders. The parent company eventually filed for bankruptcy in Spain, leaving the Indian unit saddled with debt and without financial support.

The lenders then approached the National Company Law Tribunal (NCLT) to initiate the sale of the company under the Insolvency and Bankruptcy Code (IBC) regulations in order to recover their dues. They have appointed Deloitte to manage the debt resolution process.

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According to sources cited earlier, Tata Power and Adani have submitted offers upwards of Rs 2,600 crore. Tata has bid through its arm Resurgent Power Ventures.

All the offers were taken up for negotiations by the lenders last week, sources said.

The competition to acquire the transco is indicative of strong investor interest in the power transmission sector, which is dominated by public sector companies, experts said.

“These are operating assets,” said Manish Aggarwal, partner and head, infrastructure and special situations, at KPMG. “There is virtually no risk when a transmission line is already set up and operating. It is a perfect example of a yield play which is why you see long-term investors interested in the sector. Moreover, there are very limited opportunities to invest. That’s why you are seeing competition.”

Finalisation of the winning bidder for the transco could take up to one month, sources said.

Revised offers are expected in two weeks.

The lenders will make a comparison sheet and select the best offer after which they will approach their individual boards for consent before putting the best offer to a vote, sources said.



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