State Bank of India led Consortium Plans to Acquire 51% Stake in Salaya Thermal Power Plant in Gujarat, India from Essar Power

Published: Oct 10 2017
Deal Summary

A consortium led by State Bank of India, a financial services provider, intends to acquire 51% stake in Essar Power Gujarat Ltd., a special purpose vehicle which owns Salaya thermal power plant situated near Essar Oil's refinery complex at Vadinar, Devbhumi Dwarka district, Gujarat, India, from Essar Power Limited, a power generation company. The total installed capacity of 1,200 MW comprising two units of 600 MW each. The Salaya unit I (600 MW) started commercial operations from April 2012 and the second unit of 600 MW got commissioned in June 2012.

The consortium who are lenders to the Essar Power Gujarat, will invoke pledged shares to take control of the power plant. The decision to acquire 51% equity interest has been taken weeks before a slice of the INR45,000 million (USD685.7 million) outstanding loan gets the tag of non-performing asset in banks’ books. Over the next 18 months, the consortium will have to find a buyer. While Essar Power would continue to hold 49%, the lenders are expected to place their nominees on the board and call the shots.

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