Hyderabad, Oct. 14: The financial institutions have finally taken over the management of Spectrum Power Generation Ltd (SPGL), the first fast track independent power producer in Andhra Pradesh.
The decision was taken at an emergency meeting of the board held on October 11 when the consortium of financial institutions, led by the Industrial Development Bank of India (IDBI) took charge of the company which was suffering heavy losses.
The gas-based Rs 1200-crore power project at Kakinada, promoted by Spectrum Technologies and the Bambino group of companies, was in the crisis following a dispute between the NRI promoter A.V. Mohan Rao and M.Kishan Rao, the domestic partner.
The dispute thwarted the power producer’s plan to come out with a public issue and the management of SGPL, headed by M.Kishan Rao, was charged with misappropriation of funds by the NRI partner.
The FIs together have an exposure of around Rs 800 crore to the project and have converted a portion of that into equity.
The institutions have inducted their nominees into the board in place of the retired directors from the core promoters’ group. The other promoter — Rolls Royce — also appointed two nominees to the board.
The newly formed board, which met here on Saturday, elected K Narasimha Murthy, nominee director of IIBI, as its chairman and set up a five-member committee of directors (CoD).
The committee has been given the mandate to pick a professional managing director in place of Kishan Rao. The panel is expected to meet on Wednesday to take stock of the situation.