GVK Power lenders to restart IBC process

An earlier attempt to find a buyer for the company was abandoned by lenders in May because the two resolution plans received "were non-compliant" with the provisions of the request for proposals and the bankruptcy code, showed the documents accessed by ET.

Lenders to GVK Power and Infrastructure (GPIL) would re-run the debt-laden company's insolvency process and seek separate bids for each of the four individual assets that cover businesses as diverse as land parcels, power, roads, and a residual stake in the Mumbai airport, documents accessed by ET showed. About ₹16,000 crore of bank funds are stuck in this account."This is the second attempt to find a buyer," a finance industry executive aware of the details told ET. "Lenders believe that selling the company on an asset basis will lead to better value since this company has different businesses and not all bidders will be keen to bid for the company as a whole."An earlier attempt to find a buyer for the company was abandoned by lenders in May because the two resolution plans received "were non-compliant" with the provisions of the request for proposals and the bankruptcy code, showed the documents accessed by ET.

The GVK Group holding company, which has subsidiaries GVK Perambalur SEZ, GVK Energy, GVK Transportation, and a minority stake in the Mumbai airport business, owes ₹15,944 crore to verified creditors led by ICICI Bank.

The resolution professional, Satish Gupta, is now seeking separate plans for four assets - land, the power unit, roads and the airport stake. Potential buyers can also give an offer for all four assets, showed the documents.RP Satish Gupta declined to comment on ET's queries on the revamped bankruptcy resolution plans.Bidders can submit a bid for GVK Perambalur SEZ, through which the company owns an industrial freehold land parcel of more than 2,600 acres at Perambalur district, Tamil Nadu, abutting the Chennai-Trichy highway. Bidders can also give offers for the residual 1.7 per cent stake in GVK Airport Developers Ltd that previously owned the Mumbai airport, now a part of the Adani Group that owns the Mumbai and Navi Mumbai International Airports.Also on offer, separately, is a 100 per cent stake in GVK Energy, which holds 60 per cent in the Alaknanda Hydro Power Company, a 330 MW hydro power plant in Uttarakhand with a long-term power purchase deal. It also has some coal subsidiaries in India and abroad.Interested parties can bid for the holding company's residual assets as a separate category. These include stakes in the Deoli-Kota Expressway, GVK Bagodara Vasad Expressway and GVK Jaipur Expressway Pvt Ltd.Bidders can submit expressions of interest by July 8, with a ₹10 crore earnest money deposit (EMD) in case they want to bid for the whole company. EMD for only the Perambalur SEZ is set at ₹5 crore, for the airport stake at ₹3 crore and energy and residual stakes at ₹1 crore, respectively.ICICI Bank is the largest creditor with 44 per cent, followed by Bank of India with 28 per cent and Canara Bank with about 12% stake, documents show. Lenders are most likely going to call for resolution plans later this month depending on the demand seen for various assets.

Late May, the Insolvency and Bankruptcy Board of India (IBBI) allowed resolution professionals to sell distressed entities either as a whole or their assets individually in a bid to give greater flexibility in debt resolution.