SBI invokes guarantees given by KSK promoters | Economic Times

State Bank of India (SBI) has invoked personal guarantees of KSK Energy’s promoters that they had provided for a ₹5,000 crore loan they had obtained for KSK Mahanadi Power.S Kishore and KA Sastry had arranged financing for the power company a decade ago with bulk of the debt being financed by Indian banks and the equity coming from erstwhile Lehman Brothers and certain customers.KSK Mahanadi Power’s 3600 megawatt power project located in Chhattisgarh ranks amongst the five largest thermal power projects in India.The company is undergoing insolvency proceedings at NCLT.Financial creditors have filed claims for recovery of ₹30,000 crore against the power company. This includes loans granted to the company and interest that has accumulated over time.S Kishore declined to comment on the matter citing that it was at NCLT.Kishore and Sastry, who are former investment bankers, were among the success stories of the thermal power investment boom that happened in the early 2000s and lasted more than a decade. They were amongst the first to tap international capital markets by listing their holding company, an Isle of Man incorporated entity, in the UK way back in 2004. They then followed this through with a listing of their Indian entity KSK Energy Ventures through an initial public offering in 2008.They ran into financial trouble after delays and cost overruns at the KSK Mahanadi power project, which also suffered due to coal supply issues.This is not the first instance where SBI has invoked personal guarantees provided by promoters whose companies have defaulted on loans. Anil Ambani, Atul Punj and Venugopal Dhoot are among other entrepreneurs whose personal guarantees have been invoked by the lender.