Mumbai, Sep 16 (IANS) The Maharashtra government on Friday granted approval for the demerger of Ratnagiri Gas & Power Pvt Ltd (RGPPL) into two separate companies for viability and prevent it from being declared as a non-performing asset (NPA).
The decision was taken at a cabinet meeting presided over by Chief Minister Devendra Fadnavis and comes around a year after the RGPPL board had approved the demerger plan.
Built by the erstwhile US firm Enron, the Rs 12,000 crore, 1,967 MW Dabhol Power Project, as it was known at the time, was closed since December 2013 but revived in November last year by the central government as RGPPL under a JV between the NTPC Ltd and GAIL Ltd.
After the demerger, the two new companies will be known as Ratnagiri Gas & Power Pvt Ltd to manage the power plant and the other will be Konkan LNG Pvt Ltd to operate the five million per annum LNG import facilities in coastal Ratnagiri, around 325 km south of Mumbai.
The state's approval was necessary since the Maharashtra government holds a 13.5 percent stake in RGPPL through the MSEB Holding Company, and other stakeholders include FIs (35.41 percent), NTPC and GAIL (both 25.51 percent each), an official said. In the new KLNGPL, MSEB Holding will have a 4.10 pecent equity.
Post-revival, the RGPPL currently generates 500 MW power which is supplied to the Indian Railways.
An official said that the lenders were insisting on the demerger which has now been cleared by the state cabinet and a part of the company's debt of around Rs 7,000 crore has already been converted into equity after which its share capital stands at Rs 3,820.27 crore.
The state government will also provide reliefs in VAT, CST and transmission cess to the new entities, both located in the piecturesque Anjanwel village of Ratnagiri.
Anouncing the demerger plan last year, Union Power Minister Piyush Goyal had said that the power generation would be through use of subsidy on LNG being provided under the Power System Development Fund to help power companies buy expensive imported fuel.
At the time, he had said that the NTPC and GAIL would infuse fresh equity into the project and the lenders will offer fresh credit.
