SBI moves NCLT against Essel Infraprojects, the bank has Rs 100 crore exposure in 2 SPVs – EQ Mag Pro
The SPVs are involved in separate legal proceedings with SBI. One of them, Coruscation Vidyut Vitaran (Ujjain), which was earlier known as Essel Vidyut Vitaran (Ujjain), is facing proceedings at debts recovery tribunal under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.
State Bank of India has moved the National Company Law Tribunal (NCLT) against Essel Infraprojects for recovery of debts under the Insolvency and Bankruptcy Code (IBC), according to people aware of the matter.
Essel Infraprojects is the holding company for the infrastructure businesses of media baron Subhash Chandra. It holds assets such as toll roads, power distribution licences, transmission assets, solid waste management contracts and solar power projects through about three dozen special purpose vehicles (SPVs).
Rising Debt Burden
SBI had loaned around ₹100 crore to two of those SPVs, which were backed by corporate guarantees of Essel Infraprojects, according to sources.
The SPVs are involved in separate legal proceedings with SBI. One of them, Coruscation Vidyut Vitaran (Ujjain), which was earlier known as Essel Vidyut Vitaran (Ujjain), is facing proceedings at debts recovery tribunal under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. Essel Infraproject has also been made a party to those proceedings, sources said.
The second SPV, which has a solid waste management contract in Jabalpur, is facing insolvency proceedings at NCLT. The SPV was earlier known as Essel Jabalpur MSW. It has now been renamed.
ET’s queries to SBI and Essel Group remained unanswered until press time on Tuesday.
Essel Infraprojects was once seen as an emerging rival to established infrastructure giants. Its ambitions were on a par with those of the most well-entrenched infrastructure companies such as L&T, as per industry watchers.
However, a rising debt burden, which totalled around ₹14,000 crore by 2019, and contracts that got wound up in litigation, or projects that got delayed or cancelled, resulted in the company facing financial distress.
Source: PTI
