Moser Baer Solar (MBSL) has requested public sector lender Central Bank of India to defer its loan repayment schedule and allow the company to run on a ‘going concern’ basis. The company is facing insolvency proceedings at the principal bench of the National Company Law Board (NCLT) on a petition filed by Central Bank. “We have submitted a proposal and they are examining it,” MBSL’s counsel told NCLT’s bench on Thursday.
Though lawyers — representing the bank and MBSL — declined to divulge details of the proposal, sources said the solar panel manufacturer has recently urged the bank to consider the proposal as the solar power industry has been suffering due to unprecedented cheaper imports of solar panels from China. The next hearing is scheduled on September 25.
Sources added that the company has a debt of around Rs 1,000 crore at present and it owes Central Bank a little less than Rs 100 crore. Last month, the bank had sought insolvency proceedings against the solar panel manufacturer under Section 7 of the Insolvency and Bankruptcy Code (IBC).
Once the petition is admitted, NCLT would appoint an insolvency resolution professional (IRP), who, 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 — this can be extended to 270 days — the borrowing entity will go into liquidation. The powers of the company’s board will also stand suspended with the appointment of the IRP.
A subsidiary of Moser Baer India, 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.
According to renewable energy research agency Bridge to India, the country imported $3,197 million worth of solar photovoltaic cells in FY17, up 36% year-on-year. However, the government has recently initiated an anti-dumping investigation against the import of solar cells from China, Taiwan and Malaysia following a plea by the Indian Solar Manufacturers Association.