A consortium of lenders, led by Canara Bank, has sought bids to replace Gammon Infrastructure Projects-owned Rajahmundry Godavari Bridge (RGBL) as the operator of a bridge across the river Godavari from the Kovvur side to the Rajahmundry side in Andhra Pradesh.
A consortium of lenders, led by Canara Bank, has sought bids to replace Gammon Infrastructure Projects-owned Rajahmundry Godavari Bridge (RGBL) as the operator of a bridge across the river Godavari from the Kovvur side to the Rajahmundry side in Andhra Pradesh. “Canara Bank, acting on behalf of consortium of banks and financial institutions of the company, has been mandated to identify a suitable nominated company for substituting the company to operate the project which is operational since November, 2015,” the bank said in a public notice.
As of January 2018, the bridge operator’s outstanding debt stood at `566 crore, according to a rating update by Care Ratings, which assigned a ‘D’ rating to the company on grounds of non-cooperation by it.
Last month, Gammon Infrastructure informed the stock exchanges that RGBL had served a notice of termination of the concession agreement in respect of its project for design, construction, finance, operation and maintenance of the 4.15-km-long four-lane bridge, along with 10.34 km of approach roads, because of several breaches of the agreement by Andhra Pradesh Road Development Corporation (APRDC). The project contributed `57.89 crore to the consolidated revenue of Gammon Infrastructure in FY18.
As a result of the termination of the contract, payments to the tune of `1,123.37 crore became due and payable by APRDC within 15 days of the termination notice, Gammon Infrastructure said.
On July 9, the same day as the termination of the concession agreement, Union Bank of India initiated insolvency proceedings against Rajahmundry Godavari Bridge at the Mumbai bench of the National Company Law Tribunal (NCLT). Union Bank is one of the lenders to the project.
“RGBL has represented to Union Bank of India to reconsider moving the proceedings before NCLT and explore better options in the interest of the project, lenders and all stakeholders,” Gammon Infrastructure stated in the notification to the exchanges.