Mumbai: In a major relief to Housing Development and Infrastructure Ltd (HDIL), Bank of India (BoI) on Tuesday said it will withdraw the insolvency petition against the Mumbai-based property developer.

The company and its lender informed a dedicated bankruptcy court in the city that they have reached a settlement formula under which HDIL will repay the bank in instalments and clear all dues by August 2019.

Earlier in the day, the builder had informed the tribunal that it will repay the bank’s dues through its own funds.

Bank of India is seeking to recover 511 crore from the realty company. “HDIL will repay its dues through structured payments and the lender has accepted the offer," the Bank of India counsel told a division bench of the National Company Law Tribunal on behalf of both parties.

“The real-estate firm is also working out on a settlement term with another public sector lender, Jammu & Kashmir Bank Ltd, and the company will be able to pay by 15 November." HDIL owes about 60 crore to Jammu & Kashmir Bank.

A division bench of National Company Law Tribunal presided over by Bhaskara Pantula Mohan and V. Nallasenapathy, allowed Bank of India to withdraw the insolvency petition against HDIL.

In July, Andhra Bank, one of the lenders to HDIL, had withdrawn its insolvency case after the realty company agreed to pay 40 crore in a one-time-settlement.

HDIL, once India’s third-largest builder by market value, is facing litigation from several lenders.

Last month, it had reached a similar settlement with Union Bank of India, after which the public sector lender withdrew its insolvency petition to recover around 143 crore.

According to Bloomberg data, in FY 2018, the company’s total debt stood at 2,268.56 crore, and had reported profit of 95.7 crore.

In the year-ago period it had total debt of 2,521.3 crore and had posted profit of 174.65 crore.

An email query to HDIL seeking comment remained unanswered till press time. Nishit Dhruva, managing partner of law firm MDP and Partners, representing Bank of India, confirmed the withdrawal of the case.

He, however, refused to divulge the details of the settlement pact.