In a sudden U-turn, Naveen Jindal-promoted Jindal Power has dropped out of the race to acquire Lanco Amarkantak Power. Just last week, the company had topped an offer by Adani Power for the distressed thermal power company undergoing corporate insolvency proceedings.
Following this development, only three bidders – Adani Power, Reliance Industries and Power Finance Corporation-led consortium – will participate in the proposed auction process.

On Tuesday, Jindal Power applied with Amravati National Company Law Tribunal (NCLT) to withdraw its petition, said people with knowledge of the matter.

In mid-January, it sought the tribunal’s approval to participate in the sale process of the power company. In response, lenders sought a written commitment that Jindal Power will give an unconditional, upfront cash offer. Lenders also asked them to abide by all Request For Resolution Plant (RFRP) terms.

Jindal Power Quits Race to Acquire Lanco AmarkantakAgencies

“Jindal Power did not provide a written commitment. They informed the tribunal that they would give it only after receiving approval from adjudicating authority,” said one of the persons cited above.”Probably they were not comfortable giving unconditional and upfront offer and thus they pulled out of the race,” the same person added.

Jindal Power did not respond to ET’s request for comments.On January 12, Jindal Power filed a petition with the tribunal seeking approval to participate in the proposed auction of Lanco Amarkantak, and on January 16, it gave ₹4,203 crore cash offer along with a ₹100-crore bank guarantee, as reported by ET on January 13 and January 17, respectively. Jindal Power’s ₹4,203 crore offer is a tad higher than ₹4,100 crore offered by Adani Power a month ago.

In a desperate attempt to acquire the company, Adani Power improved its offer to ₹4,100 crore from ₹3,650 crore offer given in November. However, Adani’s unsolicited offer was made almost 11 months after 95% of lenders voted for a ₹3,020-crore resolution plan given by a PFC-led consortium.

By the time Adani gave an offer, the CCI had endorsed the PFC-led consortium’s acquisition and lenders were awaiting NCLT’s approval. Hence, lenders sought directions from NCLT to allow them to consider Adani’s plan which was made after the voting process concluded. This month, the tribunal permitted lenders to hold a fresh auction for the sale of the thermal power company with Adani’s offer of ₹4,100 crore as base bid. Along with the PFC-led consortium, Reliance Industries – which gave a resolution plan initially, too – will be invited to participate in the auction, people cited above said.

Lanco Amarkantak’s first phase, which is fully operational, has two units of 300 MW each.

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