Tata Power JV buys 75% stake in Prayagraj for Rs 6,000 crore

New Delhi : Resurgent Power, a joint venture of Tata Power Company and ICICI Ventures, has acquired a 75 per cent stake in Prayagraj Power Generation for Rs 6,000 crore, the company said on Wednesday.

Prayagraj Power is a former subsidiary of Jaiprakash Power Ventures and operates a 1,980-MW Bara power plant in Uttar Pradesh.

Tata Power holds 26 per cent in Resurgent Power through its Singapore-based subsidiary, while 74 per cent is held by ICICI Bank and other investors. ICICI Ventures is a wholly owned subsidiary of ICICI Bank.

Prayagraj Power owes around Rs 11,086 crore to State Bank of India-led consortium. In addition, the company has not serviced interest on term debt since February 2017 and has an outstanding non-fund based facility of Rs 94 crore. The banks will take a haircut of almost 50 per cent with the deal, a person in the know of the matter said. Currently, the consortium of lenders holds 89.47 per cent in the company, while Jaiprakash Associates holds 10.53 per cent. This is the first deal of a stressed power asset outside the Insolvency and Bankruptcy Code, after the Reserve bank of India’s Feb 12 circular set a deadline of 180 days for resolution of stressed loans.

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