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CFM ARC Nets Rs3,706 Cr Profit from Sale of Vidarbha Plant to Adani Power

CFM Asset Reconstruction Company (ARC) has earned a significant Rs3,706 crore profit from the sale of Vidarbha Industries Power Ltd's 600 MW thermal power plant near Nagpur to Adani Power, nearly tripling its initial investment of Rs1,265 crore. The acquisition was executed via an insolvency process and was approved by the National Company Law Tribunal (NCLT). The total deal value stood at Rs4,000 crore, of which Adani paid CFM the full amount as the sole creditor.

CFM had taken over the distressed asset from a consortium of six lenders including Axis Bank, SBI, PNB, BoB, Canara Bank, and Bank of Maharashtra in July 2023, through a Swiss challenge method. Despite the plant being non-operational due to coal supply issues and legal disputes over PPA defaults, Adani outbid NTPC and Vedanta in a competitive process.

The acquisition cost per MW (Rs6.6 crore) remains significantly lower than the Rs29 crore/MW cost of building new thermal plants, making this a strategic bargain for Adani amid rising power demand. Adani Electricity Mumbai also repurchased $49.5 million in debt, reinforcing its strong financial health and flexibility in managing liabilities.