Companies

NCLT orders insolvency process against L&T Halol

Our Bureau Chennai | Updated on July 24, 2019 Published on July 24, 2019

Oriental Bank of Commerce files petition saying the firm has defaulted in repayment of ₹77 crore

The National Company Law Tribunal (NCLT), Chennai Bench, has ordered initiation of insolvency proceedings against L&T Halol - Shamlaji Tollway Ltd (L&T Halol) on a petition filed by Oriental Bank of Commerce (OBC), which alleged that the company had defaulted in repayment of ₹76.68 crore as on December 27, 2018.

L&T Halol was a special purpose vehicle of L&T Infrastructure Development Projects Ltd to augment the 173-km long, two-lane road to a four-lane divided road from Halol to Shamlaji on State Highway 5 in Gujarat on a Build-Operate-Transfer (Toll) basis.

The company said that there was no default in repayment on the debt. Even if there was a default, the bank on its own cannot independently initiate proceedings against the company, said information in the order by BSV Prakash Kumar, member (Judicial), NCLT Chennai Bench.

₹155-crore loan

OBC had disbursed to the company a loan of ₹155 crore in 2009.

However, the company failed to service the debt, and the account was declared as an NPA by the bank on June 31, 2016. The company also failed to make it a Standard Account.

The bank and other lenders entered into Master Restructuring Agreement (MRA) in February 2017 to convert the debt of ₹405.82 crore into equity out of total debt of ₹1,000 crore payable to the consortium of banks.

The bank’s counsel told NCLT that since the company had taken amount from various banks and failed to service the loan, Gujarat State Road Development Corporation Ltd was asked to take share of ₹210 crore equity by December 2017 out of the proposed conversion of debt of ₹410 crore into equity.

However, as GSRDCL did not take the equity share within 90 days from the effective date, the bank had every right to reverse the waivers and concession that were provided under the MRA and to proceed against the company on the due amount.

The bank in September 2018 said that since the company failed to comply with the concessions mentioned in MRA, it gave a ‘recall’ notice demanding repayment of debt of ₹78.27 crore within seven days. Since the company failed to repay, the bank initiated this insolvency proceedings.

IRP appointed

NCLT order said that bank has proved the existence of debt and default.

The Bench admits the application for insolvency process, and also appointed Anil Kumar Birla as Interim Resolution Professional, the order said.

Published on July 24, 2019

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor