NCLT approves Vedanta's bid to acquire Meenakshi Energy

economictimes.indiatimes.com:

Vedanta's bid to acquire Meenakshi Energy through the insolvency resolution process was approved by the Hyderabad National Company Law Tribunal last week. The Anil Agarwal company offered ₹1,440 crore against admitted claims of ₹4,625 crore, equating to a 31% recovery, distributed among lenders, trade creditors and employees. Two other bidders — Jindal Power and a consortium of Prudent Asset Reconstruction Company with Vizag Minerals — were also in the fray for the distressed thermal plant, court documents show.

Government-promoted National Asset Reconstruction Company offered ₹1,003 crore to acquire lenders' debt, as reported by ET on November 1, 2022. However, lenders declined the offer as Vedanta's was higher. Vedanta's resolution plan stands approved by a majority of 94.96% of the committee of creditors (CoC), according to an order uploaded by the bankruptcy court.

Vedanta submitted a plan on August 29, 2022, which was amended on October 28. Again, on December 26, Vedanta submitted an improved offer — from ₹650 crore to ₹1,440 crore, the court order showed. However, lenders did not immediately approve Vedanta's offer.

They decided to give other bidders an equal opportunity to submit an improved offer. On December 29, they decided to run a challenge process, wherein Vedanta emerged as the highest bidder, as reported by ET on January 7. Of the ₹1,440 crore offer, lenders will receive ₹1,143 crore against their admitted claims of ₹3,778 crore, implying a recovery of 30%.

Vedanta will make an upfront payment of ₹312 crore and the balance will be staggered over five to seven years. Vedanta's offer is above the average liquidation value, pegged at ₹1,100 crore but below the average fair value pegged at ₹2,150 crore. The