Resurgent Power, a joint venture of Tata Power, has been selected to acquire 100 per cent equity holding in “NRSS XXXVI Transmission Ltd,” a financially-stressed interstate power transmission asset.
In a release, Tata Power said that lenders of NRSS XXXVI Transmission Ltd (NRSS XXXVI) and PTC India Financial Services Ltd (PFS) have issued a letter of intent selecting Resurgent Power Ventures Pte Ltd (Resurgent) as lender’s nominee to acquire 100 per cent shareholding in NRSS XXXVI.
The transaction is part of stressed transmission asset resolution process initiated by PFS through a competitive bidding process.
Resurgent will invest equity and raise debt in NRSS XXXVI at a total enterprise value of around Rs.470 crore to implement and commission the transmission scheme and turnaround the asset, Tata Power said.
According to an analysis by T&D India, the acquisition of NRSS XXXVI Transmission Ltd marks the entry of Tata Power in the TBCB-based interstate/interregional power transmission landscape that has traditionally seen the involvement of developers like PGCIL, Adani Power, Sterlite Power, etc.
Current Project Status
NRSS XXXVI has three elements consisting of a total length of 153 km transmission line spread across the states of Uttarakhand, Rajasthan and Haryana. Out of this a small portion of 1.5 km of transmission line and two bays of 400kV are completed while work for balance 151 km of lines and 4 bays of 400kV is underway.
The completed transmission line, according to information available with T&D India, is the LILO of one circuit of the 400kV double-circuit Sikar-Neemrana transmission line. This line spans 1.5km or around 3ckm. Sikar and Neemrana represent substations owned by Power Grid Corporation of India Ltd (PGCIL).
Background
“NRSS XXXVI Transmission Ltd” is a special purpose vehicle incorporated to develop an interstate transmission scheme under the tariff-based competitive bidding (TBCB) mechanism. The scope of the transmission scheme is “system strengthening in northern region (NRSS XXXVI) along with LILO of 400kV double-circuit Sikar-Neemrana transmission at Babai.”
According to information available with T&D India, Essel Infraprojects was selected as the developer using the TBCB methodology, to implement the transmission scheme under the build-own-operate-maintain modality. Accordingly, Essel Infraprojects Ltd acquired “NRSS XXXVI Transmission Ltd” in August 2016.
The project faced several implementation difficulties primarily to do with clearances from the forest department of Uttarakhand. The developer Essel Infraprojects Ltd also ran into financial difficulties, leading to very slow project progress. By original thinking the project was to schedule to complete by June 2019.
PFS was subsequently roped in to find a new developer, leading to the eventual selection of Resurgent Power Ventures Pte Ltd.
Singapore-based JV
Tata Power, through its wholly-owned Singapore-based subsidiary Tata Power International Pte Ltd, owns 26 per cent in Resurgent Power Ventures Pte Ltd. The balance 74 per cent is held by ICICI Bank and other investors such as Power Platform Limited and Kuwait Investment Authority.
Adding further value
Speaking on the development, Dr. Praveer Sinha, CEO & MD, Tata Power said “In line with our aspiration to expand our transmission business, Tata Power through Resurgent Power had bid for acquiring 100 per cent stake in NRSS XXXVI Transmission Project. We are delighted to have been selected as the successful bidder by PTC India Financial Services (PFS). This asset fits in our overall strategy to maximize shareholder value through growth & sound investments. After successful turnaround of 1980-mw Prayagraj Power, this asset will add further value to the Resurgent portfolio.”
Second acquisition by Resurgent
In late 2019, Resurgent Power Ventures Pte Ltd, through its wholly-owned subsidiary Renascent Power Ventures Pvt Ltd, had acquired 75.01 per cent equity stake and Rs.270 crore worth of preference share capital of Prayagraj Power Generation Company Ltd (PPGCL). PPGCL (earlier owned by the Jaiprakash Group) owns and operates a 1,980-mw supercritical power plant in Uttar Pradesh. This transaction was also part of a stressed asset resolution process initiated by the lenders through a competitive bidding process.
Featured photograph is for representation only
