Ahead of Dec 20 NCLT hearing, pact with lenders eludes Punj Lloyd

ksenia kondratieva Mumbai | Updated on December 18, 2018

Punj Lloyd has operations across the infrastructure, power, defence and oil & gas sectors. This file photo shows its elevated viaduct project for Delhi Metro   -  THE HINDU

However, banks remain keen on revamp plan

Diversified infrastructure and engineering conglomerate Punj Lloyd has not been able to achieve any settlement with its lenders ahead of the hearing of its case by the National Company Law Tribunal (NCLT). The matter has been listed for arguments for December 20.

The insolvency petition was filed by ICICI Bank in June under Section 7 of the Insolvency and Bankruptcy Code (IBC) to recover ₹830 crore outstanding from the company. Some lenders, including SBI, had opposed the move of ICICI Bank. In October, International Finance Corporation (IFC) also moved NCLT to recover dues worth around $30 million.

In November, a two-member Bench headed by Justice MM Kumar directed the company to file its reply to the petition latest by November 13. Punj Lloyd delayed filing its reply, and was fined ₹25,000 per petition, according to an NCLT order dated December 11.

“Despite various opportunities granted, and the last opportunity granted on 13.11.2018, the respondent has adopted a casual attitude citing one excuse or the other. It appears to us that the respondent — corporate debtor — has misused the repeated concessions given to them to file a reply and the reply is now filed, which is delayed by two weeks,” the order said.

Several industry sources told BusinessLine the company is yet to arrive at a settlement with the consortium of lenders which includes more than 30 banks. At the same time, they added, the majority of the banks are willing to finalise the restructuring plan, as they believe in the strength of the existing promoters as well as their capability to turn around the company, which has operations across the infrastructure, power, defence and oil and gas sectors.

Widening loss

Punj Lloyd had reported a net loss of ₹1,466 crore for the quarter ended September 30 of this fiscal, against a net loss of ₹249 crore for the same period in FY18. Its total income from operations declined YoY to ₹767 crore from ₹1,086 crore.

In its investor presentation for the second quarter, Punj Lloyd said the management was confident and hopeful the restructuring proposal of the company shall be approved. “Additionally, to improve operational efficiencies, the company is taking various measures, including monetising its identified assets as avenues of raising funds,” the company said.

The company’s spokesperson did not reply to a request for comments.

Bankruptcy rule

Punj Lloyd is one of the companies that challenged an RBI circular dated February 12 before the Delhi High Court. Some companies have challenged it before the Supreme Court, too.

On February 12, the RBI directed lenders to refer an account with over ₹2,000 crore of loans to the bankruptcy court if it is not resolved within 180-days of default.

In its order dated September 11, the Supreme Court ruled that status quo be maintained with regards to all petitions against the RBI circular.

Last month, it ordered the segregation of all petitions into ‘IBC challenge matters’ and ‘RBI circular matters’. The petitions challenging IBC will be taken up first, in the next hearing scheduled for January 19.

Published on December 18, 2018

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