The Hyderabad bench of the National Company Law Tribunal (NCLT) on Wednesday approved insolvency proceedings against Lanco Infratech following an application by IDBI Bank under the Insolvency and Bankruptcy Code (IBC).
The Hyderabad bench of the National Company Law Tribunal (NCLT) on Wednesday approved insolvency proceedings against Lanco Infratech following an application by IDBI Bank under the Insolvency and Bankruptcy Code (IBC). The tribunal has appointed Savan Godiawala as the interim resolution professional (IRP) and posted the case to August 31. Lanco Infratech owes banks Rs 43,502 crore and reported a loss of Rs 890 crore on the back of Rs 1,635 crore in revenues in FY17.
According to the NCLT order, the total debt sanctioned by IDBI Bank to Lanco Infratech is about Rs 1,234 crore, in addition to another Rs 170 crore through a separate loan. “The debtor has executed several mortgage deeds in respect of several immovable and movable properties by depositing title deeds. In addition to it, Lanco Infratech has given unconditional, continuing and irrevocable corporate guarantee to pay the amount by the company in the event of the default,” the order stated.
Lanco Infratech is among the 12 companies banks have referred to NCLT benches following a nudge from the Reserve Bank of India (RBI). The RBI, had on June 13, asked banks to refer a dozen troubled companies —with a combined debt of close to Rs 2.4 lakh crore—to the NCLT, following several failed attempts at loan recovery.
Of these, 10 cases including Bhushan Steel, Essar steel, Bhushan Power and Steel have been admitted, while insolvency petitions against Lanco Infratech, Jaypee Infratech and Era Infra are being heard.
Under IBC, the IRP gets 180 days to submit a restructuring plan for the company and the timeline can be extended by another 90 days. If the company fails to come up with a solution within the specified time, it would be liquidated. The resolution plan will have to be approved by the committee of creditors by a 75% majority and submitted to the NCLT.