The Hyderabad National Company Law Tribunal last week authorised Vedanta's offer to purchase Meenakshi Energy under the insolvency resolution procedure. The Anil Agarwal firm made an offer of Rs. 1,440 crore for Rs. 4,625 crore in acknowledged claims, resulting in a 31% recovery split among lenders, trade creditors, and workers.
Jindal Power and a group consisting of Prudent Asset Reconstruction Company and Vizag Minerals were the other two bids for the troubled thermal facility. The government-sponsored National Asset Reconstruction Company offered 1,003 crore to buy the lenders' debt. Lenders, however, turned down the offer because Vedanta's was higher.
The committee of creditors (CoC) has voted in favour of Vedanta's resolution plan by a margin of 94.96%. On August 29, 2022, Vedanta presented a plan that was revised on October 28. According to the court decision, Vedanta once more made an enhanced offer on December 26 that increased from 650 crore to 1,440 crore. Lenders did not instantly accept Vedanta's offer, though. They made the choice to provide equal opportunity for other bidders to submit a better offer. They chose to conduct a challenge process on December 29; Vedanta won as the highest bidder.
Lenders will receive $1,143 billion out of the $1,440 billion offer, which represents a 30% recovery of their recognised claims of $3,778 billion. Vedanta will pay a 312 crore advance, with the remaining amount spread out over five to seven years. The Vedanta offer is higher than the typical liquidation value, estimated at 1,100 crore, but lower than the typical fair value, estimated at 2,150 crore.
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