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Insolvency proceedings: NCLT allows ICICI Bank’s plea against Punj Lloyd

The petition of ICICI Bank under Section 7 of the Insolvency and Bankruptcy Code pertains to a default amount of Rs 853 crore by Punj Lloyd.

ICICI Bank had filed the petition in the NCLT in June last year.
ICICI Bank had filed the petition in the NCLT in June last year.

The National Company Law Tribunal (NCLT) on Friday admitted a petition filed by ICICI Bank against engineering and infrastructure company Punj Lloyd. The ICICI Bank petition under Section 7 of the Insolvency and Bankruptcy Code pertains to a default amount of Rs 853 crore by Punj Lloyd, founded by Atul Punj.

On the day when the NCLT admitted the petition, three independent directors of the company — Phiroz Vandrevala, Uday Jit Singh Walia and Shravan Sampath — resigned with immediate effect.

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In addition, Dinesh Thairani, group president — legal & company secretary, has also resigned from the company with immediate effect.

ICICI Bank had filed the petition in the NCLT in June last year. At that time, Punj Lloyd had said more than 90% of the lenders agreed to support a resolution plan under the leadership of SBI for restructuring the outstanding debts of the company.

Punj Lloyd had posted a loss of Rs 2,795 crore in Q3FY19, which was among the biggest losses posted by companies during the quarter. It had a net borrowing of Rs 8,003 crore as on December 31, 2018.

In a presentation made to investors last month, the company had maintained that it is confident of a favourable outcome of its pending restructuring proposal.

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Punj Lloyd, as part of its financial restructuring to pare debt, had submitted a “scheme of restructuring” with its lenders. In 2018, it had also obtained mandatory approvals from shareholders for the same. As per the Reserve Bank of India Circular dated February 12, 2018, the restructuring was to be completed by August 27, 2018.

Some of the lenders had expressed their dissent over the scheme of restructuring and filed application for recovery of its dues before the National Company Law Tribunal and Debt Recovery Tribunal. Lenders had also issued notice under the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002.

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