Edelweiss ARC exits Adhunik as Davidson Kempner takes control
Mumbai:
Edelweiss Asset Reconstruction Company
will make a full exit from Adhunik Power & Natural Resources (APNRL), recovering about ₹1,250 crore, after global alternative asset manager
Davidson Kempner
issued a ₹1,400 crore loan to the power producer and its promoter-linked entities.
The funds, structured as 10-year
non-convertible debentures
(NCDs) with a 16.89% coupon, will be used to refinance Edelweiss's outstanding debt and to acquire its equity and optionally convertible debentures (OCDs) in Adhunik, giving the ARC a clean exit.
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Of the total, ₹1,250 crore was lent directly to Adhunik Power, with the remaining routed through group companies.
The fresh refinancing will help Adhunik lower its restructured debt of ₹2,800 crore while also reducing the cost of borrowing.
A spokesperson for Davidson Kempner declined to comment while Edelweiss did not comment.
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Edelweiss, which had acquired Adhunik via the insolvency resolution route, had been gradually monetising its exposure through asset sales and repayments. The latest deal marks the end of Edelweiss's involvement, transferring control to Davidson Kempner-backed entities.
In 2017, Edelweiss ARC took on debt from
State Bank of India
for ₹3,200 crore under a 15:85 cash-to-security receipts structure, wherein 15% was paid in cash and 85% in security receipts (SRs). Adhunik has since improved its financial position, recently recovering ₹780 crore from discoms, improving its liability reduction and operational stability.
Davidson Kempner's fund helped Adhunik cut borrowing costs by 4-5% compared to prior obligations. The refinancing deal also tracks a recovery in valuations of Adhunik's 540 MW
coal-based thermal plant
in Jharkhand from ₹2 crore/MW to ₹3-3.5 crore/MW, supporting a viable debt load of around ₹1,600 crore.
Adhunik Power has also boosted its liquidity after recovering ₹780 crore from discoms.
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