The company was referred to the insolvency court under Section 7 of the Insolvency and Bankruptcy Code (IBC) in June 2018.
The Hyderabad bench of the National Company Law Tribunal (NCLT) has admitted Lanco Amarkantak Power (LAPL) for the process of insolvency resolution over a claim of Rs 974 crore made by Axis Bank.
According to the balance sheet, the infra company had a net debt of Rs 9,853 crore at the end of FY17. The other lenders to the company are PFC, REC and IOB. The company was referred to the insolvency court under Section 7 of the Insolvency and Bankruptcy Code (IBC) in June 2018.
The NCLT bench of K Anantha Padmanabha Swamy and Binod Kumar Sinha, held: “The instant petition is hereby admitted and this adjudicating authority orders the commencement of the corporate insolvency resolution process which shall ordinarily get completed as per the timelines stipulated in section 12 of the IB Code, 2016, reckoning from the day this order is passed.”
LAPL, one of the coal-fired thermal subsidiaries of debt-laden Lanco Infratech, is located in Chhattisgarh and has an operational capacity of 600 MW. The 1,320 MW phase 2 project was stuck mid-way due to cost overruns, leading to the loan defaults.
According to Axis Bank, the default under the sanctioned facilities was triggered on August 31, 2017 and the loan was categorised “Doubtful 2” on March 31, 2018. The lender had granted the company a term loan facility worth Rs 500 crore in March 2011 followed by additional debt and bank guarantees in May 2013, March 2015 and February 2017 to the tune of Rs 361 crore. These facilities were fully recalled by the bank in May 2018.
On its part, LAPL had opposed the Axis Bank’s plea stating that no default had occurred at the time of filing the petition and loan recovery proceedings were already underway at the Debt Recovery Tribunal, Delhi.
The tribunal appointed Saurabh Tikmani as the interim resolution professional and directed him to call for submissions of claims by creditors. Advocates Bishwajit Dubey and D Narendar Naik represented Axis Bank at the NCLT Hyderabad.
The NCLT Hyderabad had admitted Lanco Infratech, which owns 80.96% stake in LAPL, for insolvency in August 2018. The infrastructure firm has a consolidated debt of over Rs 45,000 crore and was one of the initial 12 stressed assets that was identified by the RBI for resolution under the IBC in 2017.