Mumbai: JSW Energy has submitted a revised bid of ₹ 6,200 crore for the debt-laden Prayagraj Power Generation Co. Ltd, outbidding Resurgent Power Ventures Pte Ltd by ₹ 200 crore, two people close to the development said on condition of anonymity.

The move is likely to heat up competition, as Resurgent has been already given the go-ahead by the creditors of Prayagraj to acquire a 75% stake in the firm.

Resurgent Power is a joint venture between Tata Power Co. Ltd and ICICI Venture Funds Management Co. Ltd, Kuwait Investment Authority, Oman State General Reserve and Canadian pension fund Caisse de dépôt et placement du Québec. It is an investment platform that focuses on acquiring thermal and hydroelectric projects.

Established in September 2016, Resurgent is owned 26% by Tata Power and 10% by ICICI Venture. The remaining stake is held by the pension funds.

Earlier, JSW Energy had offered to pay ₹ 5,900 crore in upfront cash but would not take on the tax liabilities that would have emerged after the deal closure. “As per the revised bid, JSW is providing ₹ 6,200 crore as upfront cash and offering 15% equity stake to the lenders. The firm has also agreed to meet the tax liabilities that would emerge later," said the first of the two persons mentioned above. He said the tax-liabilities are estimated to be around ₹ 2,800 crore.

On Wednesday Tata Power announced that Resurgent Power received a letter of intent from creditors of Uttar Pradesh-based Prayagraj to acquire 75.01% stake in the firm. It had submitted a bid of around ₹ 6,000 crore and offered 14% equity stake to the lenders in Prayagraj after the acquisition. It had also agreed to settle the tax dues.

“JSW had also received the letter of intent from the lenders. Resurgent’s bid, however, was unanimously approved later as it had agreed to settle the tax dues. JSW has submitted the revised proposal with the State Bank of India now," the second person said. SBI is the lead banker for Prayagraj.

The 3x660 megawatt (MW) super critical coal-based power project was named by the Reserve Bank of India in its 12 February circular directing banks to resolve the account by 27 August. Insolvency proceedings would have been initiated against the firm in the absence of any resolution. As on 31 October 2017, Prayagraj’s total debt stood at ₹ 11,086 crore.

Mails sent to the spokespersons for JSW Energy and Tata Power went unanswered.

According to the proposal for sale of majority shareholding in Prayagraj, prepared by a lenders’ consortium led by the State Bank of India, the firm’s debt ballooned because of project delays. Overall costs spiralled to ₹ 15,537 crore from the original estimate of ₹ 10,780 crore due to a 33-month delay in completing the power project, the proposal stated.

Resurgent has been scouting and bidding for multiple power projects across the country. Mint reported on 7 June that Resurgent had placed an initial bid to buy a controlling stake in Jhabua Power Ltd, a unit of Avantha Power and Infrastructure. The firm had also bid for Jaiprakash Power Ventures Ltd.

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