NCLT reserves order on liquidation of Unity Infra

ksenia kondratieva Mumbai | Updated on October 16, 2018 Published on October 16, 2018

The Mumbai bench of the National Company Law Tribunal (NCLT) has reserved its decision in the insolvency case of construction company Unity Infraprojects Ltd.

The Resolution Professional (RP) for the company had, in March this year, appealed to the NCLT for obtaining liquidation order as a resolution plan was earlier rejected by the company’s lenders, the company said in the exchange filings.

The EPC player has an outstanding of over ₹3,100 crore to at least 24 banks and several NBFCs as on August 2017, according to the information available on the company’s website.

The largest financial creditors of the company include State Bank of India, Central Bank, ICICI Bank, UCO Bank and Allahabad bank, among others. While emails to the company’s spokesperson went unanswered till press time, several sources close to the company have confirmed that the case has been reserved for orders, although no specific date has been set by the tribunal.

Last month, the RP — after meeting the company’s top management — applied for a three-month extension to hold Annual General Meeting of the company for the 2017-18 financial year, it said in a regulatory filing.

Liquidity crunch

According to Unity Infraprojects’ annual report for 2016-17 financial year, the turnover of the company on a standalone basis stood at ₹247 crore (₹381 crore). The company posted a net loss of ₹1,113 crore during the year ended March 31, 2017 resulting in erosion of total net worth.

Industry watchers note that every third or fourth company out of almost 100 EPC companies active in the infrastructure space before 2017, have been going through Corporate Debt Restructuring ( CDR) and other restructuring schemes before the Reserve Bank of India came out with its February 12 circular scrapping these schemes.

EPC companies that face liquidity crunch caused by delays in getting payments or project implementations (caused by land acquisition issues and approvals), are often unable to come out of the crisis as they cannot bid for new projects.

Published on October 16, 2018
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