Essar Power Gujarat Limited (EPG) is in talks with lenders to save the utility company from bankruptcy proceedings by offering a one-time settlement (OTS) which could be implemented by the end of 2022-23.
Essar is offering Rs 16 billion to settle Rs 45 billion of loans taken for the Salaya plant, giving banks a recovery of about 36 per cent on their dues. EPG’s Salaya power plant project is a 1,200 MW (2×600 MW) imported coal-based thermal power plant located in Jamnagar, Gujarat. It has a 25-year power purchase agreement with Gujarat Urja Vikas Nigam Limited. The company is working out legal and other details to finalise the settlement. The company is financing this through proceeds from the sale of certain ports and power assets to Arcelor Mittal Nippon Steel.