Tata-ICICI energy fund to take over India coal project

Financial details of the transaction have not been disclosed, although Indian media reports indicate Resurgent offered INR60 billion ($850 million) for the asset. Prayagraj's lenders reportedly favored Resurgent's terms over a competing bid by JSW Energy, which would have paid around the same amount but required the company to assume tax liabilities from the deal.

According to India's Information & Credit Rating Agency (ICRA), Prayagraj posted an operating income of INR17 billion for the 2017 financial year, up from INR580 million the year before. However, over the same period the company's net loss grew from INR456 million to INR5.5 billion.

As part of the Jaiprakash Group, Prayagraj operates three coal power plants in Uttar Pradesh with a total capacity of 1,980 megawatts. Due to significant time and cost overruns in construction, the overall cost of the plants exceeds the initial projection of INR108 billion by nearly 50%. The total cost of INR155 billion includes nearly INR110 billion in debt.

Prayagraj has not serviced its debt obligations since February 2017. As a result, its lenders took control of the company last year and appointed the State Bank of India to find a buyer. Currently, SBI controls a 90% stake on behalf of the lenders, while the remainder is held by Jaiprakash.

Singapore-based Resurgent was launched in 2016 to take controlling stakes in power generating companies and transmission assets, with a primary focus on India. Tata has a 26% stake in the fund, with the remainder held by ICICI Venture, Caisse de dépôt et placement du Québec (CDPQ), Kuwait Investment Authority, and the State General Reserve Fund of Oman.

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• Topics
• South Asia
• Infrastructure
• Buyouts
• India
• energy
• ICICI Venture Funds Management Company
• Caisse de depot et placement du Quebec (CDPQ)