JUNE 20238Anil Ambani-backed Reliance Power has asked Vidarbha Industries Power's lenders for a one-time settlement (OTS) of 1,200 crore to pay off its debt. According to one source, Varde Partners, a leading worldwide alternative investment business, supports Reliance Power's OTS offer.Reliance Power and Varde Partners signed into an indicative memorandum of understanding in September 2022 to borrow up to 1,200 crores of debt for the settlement, discharge, and/or acquisition and restructuring of specific financial debts that Reliance Power had borrowed. Varde Partners made a 550 crore investment in Reliance Infrastructure in June 2021. Since 2019, Varde has invested in thermal power projects, such as KSK Mahanadi and RattanIndia Power.The company has proposed to pay the lenders, including Axis Bank, State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, and Bank of Maharashtra, 1,200 crore according to the proposal. According to Reliance Power's annual report, Vidarbha got secured rupee and foreign currency term loans from banks, with the total amount still owing at $2,216.43 crore as of March 31, 2022. According to a report published on February 1 by rating agency ICRA, the company'sFinancial creditors have the ability to start the corporate insolvency resolution procedure, but NCLT has the power to accept or reject the application regardless of the presence of a default, according to an important judgement issued by the Supreme Court on July 12, 2022. In order to make it clear that the NCLT must accept an application if there is a defined default, the government proposed a change to the IBC in January 2023. At the Butibori Industrial Area in Nagpur, Maharashtra, Vidarbha Industries Power runs a domestic coal-based facility with a capacity of 600 MW (2x300 MW). As the Indian steelmaker searches for fuel for its blast furnaces, JSW Group has entered the competition to buy two coking coal mines from Australia's BHP Group in a potential $1.5-2 billion deal. BHP is selling the 20 MTPA Daunia and Faunus mines in Queensland after experiencing a 32% decline in half-year earnings, displeasure with the state's increased coal royalty, and ESG (environmental, social, and governance) worries. Out of the 20 MTPA, 15­16 MTPA are coking coal used to make steel, while the remaining 10 MTPA are thermal coal.JSW requires 18 mt of coking coal annually to operate at full capacity. The company needs roughly 4.5 mt of captive coking coal to reach 25 percent integration, but India does not have that level of supply. So, there is a search for worldwide assets. To reduce costs overall, it is intended to combine 20­30 percent domestic coal with high-quality coal.The cost of long-term sustainable coking coal is between $150 and $170 per tonne. However, the post-Ukraine volatility in commodity prices has resulted in $34 billion in net profit for trading or upstream miners like Glencore. The sale of coal accounted for more than half of the unexpected profits. Users like JSW were impacted by the increase in coking coal prices to $670 per tonne FOB Australia in March 2022, up 75 percent from the previous year. JSW has developed its mining expertise over the years and now runs four mines in Odisha, nine in Karnataka, a lignite mine in Rajasthan, as well as one mine in the US and one in Dubai. RELIANCE POWER PROPOSES SETTLEMENT OF RS.1,200 CRORE TO VIDARBHA INDS LENDERSJSW EYES COAL MINES OF AUSTRALIA'S BHP GROUP IN POTENTIAL $1.5-2 BILLION DEALTOP STORY
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