McNally Bharat receives show-cause notice from lenders

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August 03, 2021 5:00 AM

McNally Bharat Engineering Company (MBE), an engineering entity of financially stressed Williamson Magor group, has received a notice from one of its lenders to show cause as to why the company or its promoters and directors should not be included in the list of wilful defaulters as per the Reserve Bank of India’s guidelines. In […]

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McNally Bharat Engineering Company (MBE), an engineering entity of financially stressed Williamson Magor group, has received a notice from one of its lenders to show cause as to why the company or its promoters and directors should not be included in the list of wilful defaulters as per the Reserve Bank of India’s guidelines.

In a stock exchange filing on Monday, MBE informed that it received the show-cause notice from the lender on July 30, and the company is taking necessary action in this regard and will submit a “suitable reply” to the lender.

While the Khaitan family-promoted group has been making efforts to undergo a restructuring phase, debt-laden McNally Bharat is constantly facing creditors’ outrage.

The group got a major relief in October 2019, when the Kolkata bench of the National Company Law Tribunal (NCLT) had allowed a financial creditor to withdraw its insolvency petition against MBE even after admitting the petition to order the commencement of the insolvency resolution process for the company. The matter had been settled with Trinetra Electronics, the creditor, out of court as it was a small amount.

Apart from Trinetra Electronics, a few financial creditors, including Tata Capital Financial Services, and some operational creditors had also filed insolvency petitions against McNally Bharat.

According to McNally’s annual report, its bankers are State Bank of India, Punjab National Bank, ICICI Bank, Union Bank of India, Bank of India, IDBI Bank, Axis Bank, Bank of Baroda and Canara Bank, among others.

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