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Stressed assets: Shriram EPC faces insolvency; RCom, Jaiprakash fight NCLT orders
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The National Company Law Tribunal’s various branches are monitoring several hundred cases of stressed assets. In the third of a series of weekly round-ups on the insolvency cases, we check the status of the top cases that made news this week.

The Mumbai and Kolkata benches of the NCLT are closed until June 3 for summer holiday. The National Company Law Appellate Tribunal (NCLAT), however, saw petitions being filed by Reliance Communications Ltd and certain lenders of Jaiprakash Associates Ltd contesting the NCLT’s orders. Dalmia Bharat Ltd, continued its fight for Binani Cement by writing to the target company’s lenders.

Reliance Communications

The mobile-phone operator moved the NCLAT earlier this week to contest the initiation of insolvency proceedings against it. The company, along with its subsidiaries Reliance Telecom and Reliance Infratel, has filed an appeal at the NCLAT, seeking a stay on NCLT Mumbai’s order to allowe an insolvency plea by Sweden’s Ericsson.

Last week, the NCLT’s Mumbai bench had admitted Ericsson’s insolvency plea against Anil Ambani-led Reliance Communications. This prompted RCom to initiate an out-of-court settlement talks with Ericsson to “resolve commercial issues” in a bid to skip the insolvency proceedings.

Ericsson has claimed Rs 1,155 crore from RCom and its two subsidiaries. RCom’s total debt stands over Rs 45,000 crore.

Jaiprakash Associates

The NCLAT on Thursday stayed an NCLT Allahabad order asking the company to return over 750 acres of land that it had allegedly fraudulently obtained from subsidiary Jaypee Infratech Ltd. A petition was filed by three lenders of Jaiprakash Associates—namely ICICI Bank, Standard Chartered and Axis Bank—contesting the NCLT order.

Last week, the bench had ordered release of the collateral that Jaiprakash Associates had used to secure loans from the lenders. The bench had ruled that the company had transferred ownership of Jaypee Infratech’s land to its own lenders during 2015-2017 “fraudulently” and that the company must return control of such land back to the subsidiary.

The next hearing in the matter at the NCLAT is on 13 July.

Binani Cement

In the latest development in the case of debt-laden Binani Cement’s insolvency proceedings, Dalmia Bharat decided not to increase its bid to match that of UltraTech Cement Ltd saying it would be counterproductive to its fight against allowing the rival bid. The deadline for Dalmia bharat to revise its bid ended 23 May.

Instead, Dalmia Bharat has written to the lenders of Binani Cement, asking them to reveal details of UltraTech’s resolution plan. The company said it plans to continue its fight at the NCLAT and would approach the Supreme Court if UltraTech’s resolution plan is approved before the NCLAT’s hearing in the matter is over. The matter is scheduled for hearing on 10 July.

Both UltraTech and Dalmia Bharat have been locked in a battle for debt-ridden Binani Cement since March. Separately, last week, the debt-ridden cement firm’s parent Binani Industries Ltd had appealed in the NCLAT to allow the unit to exit the insolvency process by paying off creditors.

Shriram EPC

Shriram EPC Ltd, one of the largest engineering, procurement and construction firms in the country, has been admitted for bankruptcy resolution at the NCLT’s Chennai bench following a petition filed by Assets Care & Reconstruction Enterprises Ltd, according to a stock exchange filing by the company.

The bench on Thursday appointed Sanjeve Deora as the resolution professional in the matter, the filing shows. Asset Care & Reconstruction had bought over the debt of DBS Bank Ltd, the filing shows.

Shriram EPC also cancelled a board meeting scheduled for Friday to consider its quarterly financial results. On Friday, the company’s shares slumped 20%, making it the biggest loser on the BSE’s ‘B’ group of stocks.

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