Opposing the insolvency petition filed by IFCI, Jai Balaji Industries on Wednesday told the Kolkata bench of the National Company Law Tribunal (NCLT) that it needs more time to file an objection. The company owes banks Rs 2,678 crore. In FY17, Jai Balaji Industries had reported a net loss of `218 crore on revenues of Rs 1,564 crore. Its accumulated losses as on March 2017 stood at Rs 1,850.42 crore.
Last week, IFCI had filed a petition against Jai Balaji Industries (JBIL), the flagship company of Jai Balaji Group, seeking initiation of the corporate insolvency process against the steelmaker under the Insolvency and Bankruptcy Code (IBC) over unpaid dues.
On Wednesday, the matter was heard by a division bench of the tribunal, comprising justices Vijai Pratap Singh and Jinan KR.
The bench allowed the company the required time to file its objection and scheduled the next hearing for October 26. In its petition, IFCI claimed that Jai Balaji owes around Rs 31 crore.
Interestingly, on October 4, in a response to a clarification sought by the BSE, Jai Balaji Industries had said, “The company is in active discussion with IFCI to restructure/resolve the matter mutually.”
Other lenders to the company include State Bank of India, Punjab National Bank, Indian Overseas Bank, IDBI Bank, Federal Bank, UCO Bank, Allahabad Bank and United Bank of India.
SBI is planning to sell its debt in Jai Balaji to asset reconstruction companies (ARCs) and financial institutions, among others. In order to clean its books, the country’s largest bank has recently put 24 accounts on the block, including Jai Balaji.
The company said during the quarter ended June 2017, it had not provided for interest amounting to `106.72 crore on various credit facilities and loans from banks and financial institutions of the accounts, which have been classified as non-performing assets (NPAs).
According to the latest annual report, the steelmaker has been incurring losses due to unfavourable market conditions and other adverse industry scenario for the past few years. The company had applied for restructuring of its debt, under the corporate debt restructuring (CDR) mechanism, which was approved in August 2012.
The company’s scrip on Wednesday closed at `11.35 on the BSE, up 0.44% from the previous close.