NCLT to rule on Jyoti Structures insolvency case on Monday
Jyoti Structures is the first of the four bad loan cases, including Monnet Ispat, Electrosteel Steels and Amtek Auto, that banks have referred to NCLT for bankruptcy proceedings
Mumbai: The National Company Law Tribunal (NCLT) will rule on Monday on the first of the four cases referred to it under the Insolvency and Bankruptcy Code (IBC).
The tribunal reserved its order on Thursday after it heard the insolvency application filed by State Bank of India (SBI) against power distribution company Jyoti Structures Ltd.
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SBI, which is the lead banker to the company, on Tuesday filed the bankruptcy proceedings case against Jyoti Structures with the tribunal following a central bank directive.
On 13 June, the Reserve Bank of India (RBI) directed banks to refer 12 troubled companies with a combined debt of close to Rs 2.5 trillion to the NCLT.
Out of the 12, creditors have moved the NCLT against steelmakers Monnet Ispat Ltd and Electrosteel Steels Ltd, and Amtek Auto Ltd besides Jyoti Structures.
Counsel for Jyoti Structures did not raise any objections on the debt and insolvency proceedings when the matter was heard by the Tribunal on Thursday, but spoke about an offer from a prospective buyer.
“A proposal from a prospective buyer is in the offing; therefore we request that the bankers should consider this and table the proposal before the Insolvency Resolution Professional (IRP) once the insolvency proceedings start,” said Amit Vyas, counsel for Jyoti Structures.
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Consulting firm BDO India will manage Jyoti Structures, The Economic Times reported on 27 June.
At the end of March 2017, the company had debt of Rs3,387.25 crore. Jyoti Structures was one of the power sector companies hit by a lack of fuel linkages or trouble in completing land acquisition. Lenders invoked RBI’s Strategic Debt Restructuring (SDR) norms in 2015 and restructured the debt outside the provisions of SDR. Since then, banks have been trying to sell their 51% stake in the company with no success.
Animesh Bisht, a senior associate at Cyril Amarchand Mangaldas, who appeared on behalf of SBI, said all proposals for bad loan resolution would be considered.
Counsel for both parties did not elaborate on the prospective buyer.