- NCLT admits insolvency case against Lanco Infratech.
- Tribunal appoints Savan Godiawala, partner at audit firm Deloitte India, as interim resolution professional.
- IDBI Bank is the lead financial creditor for Lanco Infratech.
- Lanco Infratech is among the 12 large stressed accounts identified by RBI for resolution under IBC.
The board of power-to-construction group Lanco Infratech Ltd. stands suspended as the Hyderabad bench of the National Company Law Tribunal appointed an interim resolution professional after admitting the insolvency case filed by lenders.
The NCLT appointed Savan Godiawala, partner at audit firm Deloitte India, as the resolution professional, Lanco Infratech said in a stock exchange filing.
Godiawala will formulate a debt resolution plan that must meet the approval of a committee of creditors. If that is not achieved within 270 days, the company, or the assets in question, will go into liquidation proceedings.
Lanco Infratech is among the 12 large stressed accounts identified by the Reserve Bank of India for resolution under the Insolvency and Bankruptcy Code. The proceedings against the company were initiated by an IDBI Bank-led consortium of 27 lenders.
Also Read: Has Supreme Court Made ‘Settlements' Easier Or Tougher In The Insolvency Regime?
Lanco Infratech fortunes tumbled as investments in power and infrastructure sector turned sour due to falling demand and excess capacity. The company reported a net loss of Rs 813 crore for the quarter ended December 31, 2016, compared to a net profit of Rs 352 crore a year ago.
The company sold a 1,200 MW coal-based power plant in Udipi to Adani Power Ltd in 2014-15. Since then, it hasn't had much success in its efforts to sell assets to reduce debt.
In July 2015, lenders to the company had invoked the strategic debt restructuring scheme for Lanco Teesta Hydropower Ltd. to convert debt to equity and recover their exposure through a sale. They are yet to make any headway in the sale.
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