PFC-REC-GoS Minutes of Meeting Dated 06.02.2024

Minutes of Meeting held on 06.02.
2024 amongst PFC Limited, REC Limited and PCE Cum Secretary
Power, Govt. of Sikkim (GoS) with respect to proposal concerning change in shareholding of SUL.
BACKGROUND: Govt. of Sikkim (GOS) vide letter dated 03.02.2024 informed lenders about State
Cabinet’s decision to i) disinvest entire stake of SPICL in Sikkim Urja Ltd (SUL) i.e.60.08% to M/s Greenko
Energies Pvt. Ltd. (GEPL) along with its subsidiary i.e. Sikkim Power Transmission Ltd (SPTL); ii) takeover
of entire SPICL-PFC Loan by M/s GEPL; iii) withdrawal of the appointment of Nominee Directors of GOS
in SUL/SPTL allowing GEPL to nominate their directors on the board of SUL and SPTL; iv) transfer of
management as well as operational management control of both SUL and SPTL to M/s GEPL with
immediate effect.
In response to the above letter, PFC & REC vide their respective letters dated 05.02.2024 communicated
to Govt. of Sikkim (GoS) that the decision of GOS is in deviation to the provisions of loan documents
which require prior consent of the lenders and therefore, both PFC and REC are not agreeable to
unilateral decision of GoS.
In light of above, a meeting was held amongst PFC, REC and Govt. of Sikkim on 06-02-2024 at PFC office.
The meeting was co-chaired by CMD-PFC and CMD-REC. List of other attendees is given at Annexure I.
During the meeting following was discussed:
i. Referring to Govt. of Sikkim letter dated 03.02.2024, REC and PFC, informed that:
a. project loan was extended to SUL based on Guarantee and letter of comforts provided by GOS
and undertaking from GOS that the Govt of Sikkim’s shareholding, through SPICL, in SUL shall not
reduce below 51%. It was also informed that as per loan agreement prior approval of lenders is
required for any transfer of shareholding of Sikkim Urja Ltd.
b. Further, loan given by PFC to SPICL for equity infusion in SUL was being serviced from Govt. of
Sikkim’s free power entitlement from the project and budgetary allocation and the loan is also
secured through GOS Guarantee. Further, entire equity shares of SPICL are pledged with PFC, with
specific bar in the Pledge agreement from entering into any transaction/s by SPICL without the
written consent of PFC.
c. Therefore, any decision regarding the divestment of SPICL stake in Sikkim Urja Limited affecting
the interest of lenders can only be taken up with prior consent of lenders.
ii. While appreciating the concerns of GOS with respect to its inability to bring in additional funds
required for restoration of the project it was emphasized that restoration of the project will be
possible only with active support/ participation of GOS, especially to handle local issues.
iii. Lenders requested GoS that revival plan being prepared by SUL should take adequate care for SPICL
loan provided by PFC for equity portion and ensuring that the same does not have any adverse
impact on project viability.
iv. Any revival plan, to be submitted by SUL, should include:

 Role and responsibilities of GoS in the project
 Action plan for restoration of the project at the earliest
 Plan for funding of additional investment required for reconstruction of project.
 Plan for servicing existing debt of lenders
 Plan of Greenko/new promoter to bring in additional equity
 Plan of SUL to recover pending dues from Utilities in Haryana and Punjab and utilization of the
same
 Realization of insurance claims and also, utilization of the same. Plan/details for continuation
of 12% free power to GoS.
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v. In view of the above, lenders are of the opinion that an agreement/ consensus needs to be reached
amongst all stakeholders namely SUL, Greenko, SPICL, Govt. of Sikkim, PFC & REC agreeing to the
contours of the revival package.
vi. Lenders also requested GoS to keep the SUL as going concern and should not remove their
representatives from the board of SUL.
vii. GoS informed that cabinet has already approved the transfer of their equity share to Greenko
Energies Pvt. Ltd. Lenders also informed GoS about lack of clarity in respect to modalities/
commercial terms for transfer of equity stake in their letter dated 03.02.2024, hence lenders
requested GoS to bring out all modalities of the transaction.
viii. In view of the above discussion, following was agreed in the meeting:
 GoS to re-nominate director on Board of SUL and make all efforts to keep SUL as going concern.
 A revival plan for the project to be submitted to lenders including plan for timely servicing of
existing loans to SUL and SPICL.
 GoS to provide clarity on continuation of 12% free power in case of transfer of SPICL loan to
Greenko/new promoter. Further, GoS to provide commercial terms for transfer of equity stake.
 An agreement to be signed amongst all the stakeholders namely SUL, Greenko, SPICL, Govt. of
Sikkim, PFC and REC agreeing to the contours of the revival package along with detailed roles
and obligations of each party so as to cover all the above aspects.
 Accordingly, a Task Force with following representatives is constituted to finalize the terms of
the revival package for of the project which shall protect interest of all the stakeholders:
a. Mr. Sonam R. Bhutia, ED (SPICL) representative on behalf of Govt. of Sikkim/SPICL/SUL
b. Shri D.B.Londhe, CGM-REC
c. Shri Kamlesh Menon GM-PFC
d. Shri Alok Ranjan Malik, GM-PFC
e. Ms. Ruchi Singhal, Greenko
**************
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Annexure I
List of attendees of the meeting held amongst PFC Limited, REC Limited and Govt. of Sikkim (GoS) with
respect to proposal concerning change in shareholding of SUL
Representatives of Govt of Sikkim

Shri T. T. Lepcha, PCE cum Secretary Power Deptt, GOS
Shri Sonam Rinchen Bhutia, ED, (SPICL)
Shri Nirmal Aggarwal, CGM (SPICL)
Representatives of PFC
Shri R. R. Jha Director (Projects), PFC
Shri Manoj Sharma, Director (Comm), PFC
Shri Sandeep Kumar, ED (Fin), PFC
Shri Ali Shah, ED (Entity), PFC
Shri H. K. Das, ED (Projects), PFC
Shri Praveen Verma, CGM (L&D), PFC
Shri Kamlesh Menon, GM (Projects), PFC
Ms Roshni Abraham, GM (Entity), PFC
Representatives of REC
Shri V.K. Singh, Director (Tech), REC
Shri J. S. Amitabh CS (REC)
Ms. Valli Natarajan, ED (SOP), REC
Shri D.B. Londhe, CGM (SOP), REC
*********
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Minutes of Meeting held on 06.02.

During the meeting following was discussed:

iv. Any revival plan, to be submitted by SUL, should include:

Representatives of Govt of Sikkim

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