The Principal bench of the National Company Law Tribunal (NCLT) on Tuesday admitted Central Bank of India’s insolvency petition against Moser Baer Solar (MBSL) under Section 7 of the Insolvency and Bankruptcy Code (IBC). The bench comprising president MM Kumar and Member Deepa Krishnan appointed Ritu Rastogi as the interim resolution professional (IRP). Central Bank of India has pegged the total amount of default at Rs 114 crore. Moser Baer Solar had nothing to say in respect of the default and did not oppose the bank’s application, the order of the bench said.
Following admission, the IRP, along with a committee of creditors (CoC), will work on a resolution plan. If the committee is unable to find a solution within 180 days — can be extended to 270 days — the company will be liquidated. The powers of the company’s board will also stand suspended with the appointment of the IRP. A Moser Baer India subsidiary, MBSL’s gross debt stood at Rs 772 crore in FY13 (latest available) and it reported a net loss of Rs 207 crore on revenues of Rs 226 crore in the same period, Capitaline data showed.
Operating under sub-optimal levels in the face of rising imports from China, MBSL has been in financial distress for several years now. The company had sought restructuring of Rs 956 crore of debt in 2012-13 but the recast had failed in October last year. Meanwhile, a bunch of lenders have already issued loan recall and wilful default notices to MBSL. In the face of rising imports of cheaper Chinese modules and a World Trade Organization (WTO) mandate invalidating a government policy that favoured local module manufacturers, the market share of domestic players has been continuously shrinking.