Following the admission of loss-making Bhushan Steel under the Insolvency and Bankruptcy Code (IBC) earlier this year, State Bank of India (SBI) has now referred the company’s subsidiary Bhushan Energy — an unlisted entity — to the National Company Law Tribunal (NCLT).
Following the admission of loss-making Bhushan Steel under the Insolvency and Bankruptcy Code (IBC) earlier this year, State Bank of India (SBI) has now referred the company’s subsidiary Bhushan Energy — an unlisted entity — to the National Company Law Tribunal (NCLT). At the first hearing on Friday, the principal bench of the tribunal, headed by its president justice MM Kumar, sought a reply from the company on why insolvency petition against it should not be initiated. The matter has been listed for further hearing on December 7. Incorporated in 2005, Bhushan Energy is based in Dhenkanal, Odisha. The company reported a gross debt of Rs 2,336 crore in FY16 and posted a net loss of Rs 229 crore on revenues of Rs 622 crore in the same period, Capitaline data showed. On July 27, the principal bench had admitted the insolvency petition filed by a consortium of lenders led by SBI against Bhushan Steel. Promoted by the Singal family, Bhushan Steel owes banks a whopping Rs 44,447 crore.
It has been facing severe stress in servicing debt from the past few years and posted a net loss of Rs 3,501 crore in 2016-17 on revenues of Rs 15,027 crore. SBI on Friday also sought insolvency proceedings against ARGL, a group company of Amtek Auto. The case will be heard on December 1 by the principal bench of the NCLT. ARGL, formerly known as Amtek Ring Gears, supplies flywheel ring gear blanks and flywheel ring gears. Incorporated in 1995, the company is based in Gurgaon. On July 24, NCLT’s Chandigarh bench had admitted the insolvency petition of Corporation Bank against Amtek Auto after the company defaulted on repaying Rs 824 crore loans granted by the bank. The company owes Rs 3,928 crore to banks and reported a net loss of Rs 1,624 crore in 2016-17 on revenues of Rs 1,950 crore. Both Bhushan Steel and Amtek Auto are among the 12 companies identified by the Reserve Bank of India (RBI) in which banks have an exposure of more than Rs 5,000 crore and more than 60% of which has been recognised as non-performing assets.