V Rishi Kumar

IDBI Bank has dragged Konaseema Gas Power Limited to the National Company Law Tribunal (NCLT) in Hyderabad with a petition to initiate corporate insolvency proceedings and recovery of dues.

The gas-fired combined cycle power plant is part of the diversified VBC Group which has based its power generation on natural gas linkage in the Krishna Godavari Basin. Located at Ravulapalem near Rajahmundry in East Godavari district of Andhra Pradesh, the 445 MW gas power plant was set up with a capital cost of ₹2,100 crore.

Apart from ₹150 crore overseas credit line, the bank said it had extended several facilities including term loans and bank guarantees, with the total dues at ₹663 crore. Maintaining that the debtor has defaulted on its payments, the bank which had seized some of the properties provided as guarantees pleaded the NCLT to initiate insolvency proceedings. This power generation company joins many other power projects taken to NCLT.

Judicial Member K Ananthapadmanabha Swamy has taken on record the petition, heard the petitioner bank and posted the matter for further hearing on November 8.

The debtor, which had set up the gas-based plant basing on the natural gas supplies from the KG Basin, it had to struggle without fuel supplies, resulting in pile up of debt and defaults.

In fact, the debtor company was in the process of planning an expansion project of 820 MW (2x410 MW). It was held up due to lack of clarity on gas linkage.

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