SBI fixes plans for six stressed power assets; RBI deadline ends Monday

State Bank of India (SBI) has chalked out resolution plans for about half a dozen stressed power assets. But their future is still uncertain as other lenders are yet to come on board even as the Reserve Bank of India’s deadline for beginning insolvency proceedings ends on August 27. SBI is the lead lender, with an exposure of Rs 700 billion to these companies.

Lenders are still hoping that the latest amendment to the Insolvency and Bankruptcy Code (IBC) would come to their rescue since they have the option to withdraw an insolvency case referred to the National Company Law Tribunal (NCLT) after obtaining 90 per cent of member vote for it, an SBI executive said.

The projects for which resolutions have been worked out include those of 1,370 Mw Chhattisgarh power plant of GMR and KSK Mahanadi. They are expected to get new buyers under Samadhan — scheme of asset management and debt change structure — framed by lenders for the power sector.

Lenders are fast tracking the cases since the RBI issued a notification on February 12, withdrawing earlier schemes like SDR (strategic debt restructuring) and S4A (scheme for sustainable structuring of stressed assets), for accounts with aggregate exposure of Rs 20 billion and above, on or after March 1, which is the reference date for the circular. The cases included those where resolution process under the earlier schemes were going on, as well as those classified as restructured standard assets.

State Bank of India