Home >companies >Monnet Ispat: NCLT wants claims of other banks to be included

Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday directed the resolution professional (RP) of Monnet Ispat and Energy Ltd to include the claims of ICICI Bank, IFCI Ltd and Standard Chartered Bank in the steel maker’s bankruptcy proceedings.

The three lenders had approached the tribunal in separate petitions seeking its intervention, alleging that the resolution professional had not included their claims.

A division bench of B.S.V. Prakash Kumar and Ravi Kumar Duraisamy allowed all applications and also vacated its earlier order which had directed the creditors’ panel not to meet.

Earlier in the day, senior counsel Gaurav Joshi appearing for ICICI Bank, argued that the bank had lent $75 million (about Rs486 crore) to Monnet Power Ltd, a subsidiary of Monnet Ispat in external commercial borrowing (ECB) where the parent company was a guarantor. The company had raised that money to build a power plant in Odisha. 

“All we are saying is include us with the other financial creditors," argued Joshi.

“The corporate guarantee was invoked after the filing of the bankruptcy and, hence, the resolution professional is not including this claim under the category of financial creditor," Joshi said. 

Similarly, IFCI had lent Rs158 crore to Monnet Power Co. where parent Monnet Ispat was corporate guarantor.

Standard Chartered Bank said the resolution professional had accepted a claim for just Rs58 crore out of its total claim of Rs147 crore.

“What ICICI Bank is claiming is damage and not debt because they had neither invoked the bank guarantee nor come to the RP at the time of initiation of the process," argued Zal Andhyarujina, a counsel representing the resolution professional in the case. “Monnet Power is also under insolvency and the bank could have claimed this there as well." 

Monnet Ispat is part of the first lot of 12 large non-performing loans referred by the Reserve Bank of India (RBI) for early resolution under the Insolvency and Bankruptcy Code (IBC) last year. 

It owes lenders Rs10,000 crore and the committee of creditors has agreed to take a haircut of around 72% to settle the loan.  So far, a consortium of AION Capital Partners Ltd and JSW Steel Ltd has made a binding offer for Monnet Ispat and is considered to be the front runner to acquire the asset. AION Capital holds a 70% stake in the consortium while JSW Steel holds the rest.

Subscribe to newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperLivemint.com is now on Telegram. Join Livemint channel in your Telegram and stay updated

My Reads Logout