People familiar with the project said Jindal Power (JPL), a subsidiary of Jindal Steel & Power, will acquire the 600 MW Simhapuri Energy power plant that runs on imported coal.
JPL will acquire the power plant in the Nellore district of Andhra Pradesh for around Rs 300 crore and the deal is likely to close in more than a week, they said. JPL did not respond to an email Monday seeking comment.
Simhapuri Energy is currently under liquidation.
“JPL will acquire the asset and plans to operate it by importing coal from Indonesia and Africa. The company may start operating the plant in the third quarter of this fiscal year,” said an industry executive familiar with the development. As per the Corporate Insolvency Resolution Process Document 2020, Simhapuri Energy has secured Rs 2,474 crore secured loans from a consortium of 19 banks, led by State Bank of India and Canara Bank. It defaulted on a debt of Rs 636 crore with an overdue interest of Rs 308 crore. The SBI referred it to the court in 2020.
The company's functioning, according to industry executives, was severely affected when the plant was halted to retain power capacity for degraders in Andhra Pradesh. JPL owns thermal, hydroelectric and renewable assets with a capacity of 3,400 MW.
According to the company's website, the Jindal Mozambique Minerais Limitada owns and operates a 3 million tons/year mining concession in Chirodzi, Tete, Mozambique. The mine has been operating since March 2013 and production can be expanded to 10 MTPA.
Jindal coal mines in Mozambique and exports coking coal to steel plant in India. Granted ability to the Seine Railway. A 300MW power plant will be developed within the mining concession by Jindal entity, Jindal Investimentos Lda.
“Capital cost wise, the cost of acquiring JPL is Rs 60 lakh per megawatt. Building a new plant would have cost the company Rs 6 crore per megawatt. JPL is acquiring the power plant at a very attractive valuation in the liquidation process,” said another executive aware of the development.
Jindal Steel & Power plans to set up an integrated steel plant with a capacity of 2.25 MTPA.
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