PTC India Financial Services (PFS) has intimated the exchanges, that it shall receive its share of around Rs 125 crore as part of the total resolution amount from one of its stressed loan account in the thermal segment namely 2x600 MW (mega-watt) coal power plant located at Cuddalore district in Tamil Nadu. The instant project has been implemented by IL&FS Tamil Nadu Power Company (ITPCL). PFS had sanctioned total loan of Rs 200 crore under consortium arrangement to ITPCL for implementing the instant project.

Presently, the IL&FS group is undergoing resolution under the provisions of Sections 241 and 242 of the Companies Act, 2013 and ITPCL has been classified as an 'amber' entity i.e. an entity that is not able to meet its entire obligations during the testing period (as defined by the NCLAT order as on 15 October 2018) but can only meet operational payment obligations and payment obligations to senior secured financial creditors.

All the stakeholders, including the consortium lenders of ITPCL, had decided for debt restructuring of ITPCL under Change in Ownership Scheme as per the extant RBI circular as on 7 June 2019 and directions of the NCLAT. Subsequently, a resolution plan was approved by the consortium lenders including PFS. The resolution plan was then presented to NCLAT and as per the verbal hearing of the proceedings, it is understood that the NCLAT on its last hearing as on 1 December 2021 had accepted the resolution plan submitted by PFS amongst other consortium lenders.

As per the resolution plan, PFS is expected to receive around Rs 16 crore (based on payment schedule till Q3 FY 22 as per the resolution plan) and interest amount of around Rs 11 crore shortly and balance amount of Rs 109 crore shall be received as per the approved repayment schedule under the said resolution plan. This development shall augment the liquidity position of PFS and also result in a reduction of its stressed assets portfolio. Going forward, it shall also have a positive bearing on the yields and spread of PFS as this account was reflected in the assets but not yielding any income. Further, this is in line PFS' aim to reduce its exposure to thermal assets and contribute towards carbon neutrality.

Apart from the instant loan account, PFS during last three years i.e. FY18-19, FY19-20 and FY 20-21 had also resolved 10 other stressed accounts (principal outstanding cumulatively Rs 1,161 crore) through multi-pronged approach such as sale to ARC, resolution under IBC in NCLT, acquisition and sale of assets under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) and through One Time Settlement (OTS) offer from the promoter or new developer.

The total PFS exposure in the instant stressed account was Rs 200 crore. As per the company's press statement, PFS had already provided for the balance amount left after the resolution amount.

PTC India Financial Services' consolidated net profit surged 64.7% to Rs 52.47 crore on a 18.7% decline in net sales to Rs 242.33 crore in Q2 FY22 over Q2 FY21.

PTC India Financial Services (PFS), a Government of India initiative, is the pioneer in starting a power market in India. The company has maintained its leadership position in power trading since inception. PFS has also been mandated by the Government of India to trade electricity with Bhutan, Nepal and Bangladesh.

The trading activities undertaken by PFS include long term trading of power generated from large power projects including renewables as well as short term trading arising as a result of supply and demand mismatches, which inevitably occur in various regions of the country.