Corporation Bank plea in NCLT against Essar Ports arm
Corporation Bank says Essar Bulk Terminal Salaya Ltd defaulted on ₹196 crore loans
Mumbai: Corporation Bank has approached the Ahmedabad bench of the National Company Law Tribunal (NCLT) against Essar Bulk Terminal Salaya Ltd, a subsidiary of Essar Ports, for allegedly defaulting on loans totalling more than ₹196 crore.
The state-owned lender approached NCLT to initiate the resolution process against Essar Ports’ Gujarat-based subsidiary. The lender had declared the account a non-performing asset on 31 March 2018.
Essar Ports owns three more ports—another Gujarat-based subsidiary Hazira Bulk Terminal, Paradip Dry Bulk Terminal (Odisha) and Vizag Terminal in Andhra Pradesh.
Corporation Bank has suggested the name of Rohit Mehra as the interim resolution professional, according to the petition filed by the bank.
Stand-alone data is not available for Essar Bulk Terminal Salaya. However, according to the latest available data, as of March 2017, Essar Ports owed about ₹500 crore to its lenders.
The company reported revenue of ₹438.48 crore in fiscal year 2017, a fall of 73.5% compared to the ₹1,656.40 crore a year ago. During the same period, it reported a profit of ₹45 crore, compared to a loss of ₹58.23 crore in FY16.
“The company is in advanced stage of discussions with the mentioned lender to resolve the issue to mutual satisfaction,” said the Essar Group’s spokesperson in an email response.
An email query to Corporation Bank did not elicit any response at the time of filing the report. Nishith Dhruva, managing partner of law firm MDP and Partners, who is representing the bank, confirmed the development but refused to divulge any details as the matter is sub judice.
Essar Bulk Terminal Salaya is the fourth Essar company to face insolvency proceedings.
The group’s flagship company Essar Steel Ltd, which owes more than ₹37,200 crore, was admitted for resolution last year.
In May 2017, EPC Constructions India Pvt. Ltd, formerly known as Essar Projects (India) Ltd, was admitted for resolution.
In April, the tribunal admitted ICICI Bank’s insolvency plea against Essar Power Jharkhand Ltd for defaulting on more than ₹3,050 crore.