The National Company Law Tribunal was moved against Essel Infraprojects by SBI for recovery of debts worth nearly Rs 100 crores under the Insolvency and Bankruptcy Code (IBC).
Essel Infraprojects is another company under the Essel Group and the holding company of several infrastructure businesses for the promoter of Essel Group, Mr. Subhas Chandra. The company holds a diverse set of assets such as transmission assets, power distribution licenses, toll roads, solid waste management, solar power projects and over three dozen Special Purposse Vehicles (SPVs). The company was once considered an emerging rival to all major infrastructure companies like L&T. It possessed resources and the ambitions to tackle the established infrastructure players. However, delayed and cancelled projects, contracts winding up into litigation and a rising debt, nearly Rs 14,000 crores, sent the company into financial distress.
SBI had lended Rs 100 crores to 2 of the company’s SPVs, backed by corporate guarantees from the company. Moreover, SBI is in a separate legal proceeding with one of the SPVs. Coruscation Vidyut Vitaran (Ujjain) is facing proceedings in debt recovery tribunal under the SARFAESI Act. Essel Infraprojects is said to be a party to these proceedings as well.
This is another blow to the Essel Group as the group faces continuous humiliation at the hands of its creditors. Recently, Axis finance sent the promoter group and ZEE Ltd. a notice of threatening legal proceedings if its dues were not repaid within stipulated time. Zee and Sony (India) are heading towards a merger and proceedings like these only end up embarrassing the promoter group even further.
Highlight by Aman Agarwal.