Pioneering PPP model in Coal Sector, designed by aXYKno brings MSMC cash registers.
Maharashtra State Mining Corporation (MSMC) was allotted 3 Coal Blocks under Government Dispensation route in 2006. MSMC has awarded LoA to Gupta Coal for Warora Coal Block and Sunil Hitech Engineers Ltd for Adkoli Coal Block.
aXYKno was the sole transaction advisory for the projects and despite major hurdles took the projects towards finalization through its robust and innovative model. a’XYKno accomplished the following milestones as a transaction advisor to MSMC
- Structured a robust PPP framework which was one of its kinds in India, keeping the regulatory compliances intact.
- Joint Venture strategy was adopted this was inline with the existing mining regulation and conditions of the allotment letter.
- Project was based on ‘Build Own Operate’ (BOO) model, wherein all activities like exploration, development, operation and post operation including mine closure has to be undertaken by the Joint Venture partner.
- Upfront money payment terms by Selected Bidder to MSMC on per tonne of coal. MSMC would also get share in the profit from sale of coal as per the equity holding in the Joint Venture Company.
The bidding was a huge success with more than 163 bids sold and 152 bids submitted with global and Indian players joining-in. MSMC gained windfall profits after conduction of bidding process with Rs 200 Crore revenue generation in form of upfront Sweat equity.
