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Following a petition filed by the State Bank of India, the National Company Law Tribunal, Hyderabad, has directed insolvency proceedings against Meenakshi Energy Ltd.
The Bench of Judicial Member Anantha Padmanabha Swamy and Technical Member Binod Kumar Sinha admitted the Insolvency Petition under the Banking and Insolvency Code, 2016, and appointed Ravi Shankar Devarakonda as the Interim Resolution Professional.
While admitting the petition, the Bench declared a moratorium, which shall be operational from the date of the order till the completion of the corporate insolvency resolution process per the provisions of the Code.
The debtor Meenakshi Energy had availed a term loan and working capital from a consortium of lenders, including SBI and SBH, in different phases to set up a 300-MW plant in Phase I and a 700-MW plant in Phase II, both coal-fired thermal power projects near Krishnapatnam.
Phase II of the project incurred a cost overrun and the lenders extended additional financing for completion of the project. However, the corporate debtor defaulted in servicing the principal repayments and interest payments for Phase I and the loan was classified as a Non Performing Asset in October 2017.
The debtor contended that petitioner SBI had filed the application for insolvency as an after-thought and that the sole intention of the creditor was to armtwist and paralyse the debtor in order to meet certain arbitrary and unjust demands.
It also contended that the debtor had failed to adopt a sector-agnostic approach for stress resolution.
Significantly, the debtor plant was originally owned and held by Meenakshi Energy and Infrastructure Holding Private Ltd, which subsequently reduced its shareholding --- Engie Global purchased the shares and was inducted as the promoter of the corporate debtor.
However, Engie Energy, with a focus on renewable energy, decided to reduce thermal generation in its fuel mix and bid out the project, with India Power Corporation Ltd emerging the successful bidder.
The transaction was completed in 2016 with transfer of a 95.7 per cent stake. However, its entire stake was fully pledged with SBI CAP Trustee Company Limited. The pledge was invoked in May 2018 and India Power Corporation filed a case.
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