Naveen Jindal-led Jindal Steel & Power (JSPL) has acquired Monnet Power Company for Rs 410 crore through the corporate insolvency resolution process (CIRP).
JSPL had last month won the bid for Monnet Power. Monnet Power has an under-construction power plant with a capacity of 1050 MW in Odisha. The financial transaction of payment of Rs 410 crore was completed on 07 December 2022.
Monnet Power agreed for the corporate insolvency resolution process (CIRP) in 2018 after proceedings were carried out by the IDFC Bank. In 2019, the National Company Law Tribunal (NCLT) ordered liquidation as there was no resolution plan. Monnet’s bank debt was about Rs 3,819 crore. The power plant in Odisha will be used for captive purpose and it will consume 20-25 per cent less coal as it is very close to the JSPL’s steel plant in Angul. In addition, JSPL’s coal blocks, Utkal C, B1 and B2, are also close by. Apart from reducing the carbon footprint, this plant will also significantly reduce energy cost.
Meanwhile, JSPL is on expansion mode of its Angul plant. Its proposed expansion to 25.2 million tonne per annum from the 6 million tpa was already received nod from the state government.
What is CIRP?
Corporate Insolvency Resolution Process is a recovery mechanism for creditors. If a corporate becomes insolvent, a financial creditor, an operational creditor, or the corporate itself may initiate CIRP.