aXYKno Successfully Concludes bidding for Madhya Pradesh State Mining Corporation (MPSMC) through innovative international competitive bidding
Madhya Pradesh State Mining Corporation (MPSMC) was allotted 6 Coal Blocks under Government Dispensation route in 2006. LoA was awarded to ACC for 4 Coal Blocks and one each to Monnet Ispat and Jaypee Group. The model was developed within the PPP framework for the six coal blocks.
aXYKno accomplished the following milestones as a transaction advisor to MPSMC
- Project structuring under the PPP framework to fund the project and create a win-win situation possible de-allocation.
- Linking Cash Flows to actual production and so the payment was not upfront but the returns were calculated in such a way so as to increase revenue earnings for the State.
- Implementation of 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.
The bidding was a huge success with more than 232 bids sold and 152 bids submitted with global and Indian players joining-in. The result being – MPSMC earning profit before tax of around Rs 850 crores annually for the mine life besides fast-tracking the development of the coal blocks.
