Mumbai: Industrial Finance Corp. of India (IFCI) has approached the Mumbai-bench of the National Company Law Board (NCLT) to intervene in the insolvency and bankruptcy proceedings of Monnet Ispat and Energy Ltd to include its claim of Rs158 crore.
IFCI claimed that the resolution professional (RP) had not included its claim, which was actually a corporate guarantee given by Monnet Ispat in favour of a subsidiary.
This is the second intervention application after ICICI Bank Ltd had approached the NCLT last week to include its claim of $75 million (about Rs486 crore).
After hearing arguments, the division bench of B.S.V. Prakash Kumar and Ravi Kumar Duraisamy, directed the RP to explain why the claims of IFCI and of ICICI Bank were not admitted earlier, and also stayed the upcoming Committee of Creditors (CoC) meeting until further notice of the Tribunal.
The tribunal will hear the matter next on Tuesday.
“IFCI had given a loan to Monnet Power Co. Ltd where the parent company, Monnet Ispat, was corporate guarantor. The company defaulted on the payment. The RP has rejected the claim saying that the claim cannot be filed in relationship to uninvoked corporate guarantee," said N.P.S. Chawla, associate partner, Vaish Associates Advocates, who is representing IFCI in this matter along with firm’s another partner Melvyn Fernandes.
“However, the factual and legal position is not such."
Monnet Ispat owes lenders Rs10,000 crore and the committee of creditors (CoC) 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.
The finance company is in a hurry to get its claim to be included since the statutory deadline of 270 days to decide the fate of any company undergoing resolution is 13 April. IFCI, a government-owned development bank was established to cater long-term finance needs of the industrial sector. It was the first development finance institution to be established by the government after Independence until the establishment of ICICI in 1991.
In the Monnet case, both development banks had lent money against the corporate guarantee of the parent company.