The board of Vedanta Limited has approved the acquisition of Meenakshi Energy Limited for Rs 14.40 billion.
Meenakshi Energy was admitted under corporate insolvency resolution process in terms of the insolvency and bankruptcy code, 2016. The bid submitted by Vedanta Limited was approved by the committee of creditors recently. Of the total consideration, around Rs 3.12 billion is to be paid upfront, while the balance Rs 11.28 billion will be in the form of secured, unlisted non-convertible debentures (NCDs) issued by Meenakshi Energy , which will mature in equal instalments over the next five years. Meenakshi Energy owns a 1,000 MW coal power plant in Andhra Pradesh’s Nellore district. Vedanta currently envisages to operate 1,000 MW of Meenakshi Energy as independent power producer to cater to the needs of the market by entering into short or medium-term power purchase agreement and by supplying power to merchants. Phase I of 300 MW (2×150 MW – Unit 1 and 2) is completed. Phase II of 700 MW (2×350 MW – Unit 3 and 4) is pending to be tested and declared commercial operation date. The acquisition is estimated to be completed by 2023-24. However, the approval of the National Company Law Tribunal is pending.