Stewarts & Lloyds files for insolvency

It has filed for insolvency with the National Company Law Tribunal's Kolkata bench

Kolkata-based Stewarts & Lloyds has filed for insolvency under the provisions of the Insolvency and Bankruptcy Code, 2016. 

The company has filed for insolvency with the National Company Law Tribunal’s Kolkata bench.

While the company has paid its financial creditors, dues to operational creditors have not been paid yet. A source aware of the development said, “The company’s dues to operational creditors continue to be Rs 82 crore.” 

This source also said that the company had settled dues to banks such as State Bank of India, HDFC and Bank of Baroda. These dues amounted to Rs 40 crore.

The auditor’s note in the annual report for 2015-16 mentions that the company has defaulted payment to tax bodies as well. As of March 31, 2016, the company had not paid service tax of more than Rs 37 lakh and Rs 25 lakh worth value-added tax (VAT). It also has disputed sales tax matters worth Rs 7 crore, more than Rs 4.96 crore of income tax matters that are disputed and another Rs 3 crore of disputed service tax matters. 

During 2015-16, the company bagged orders aggregating Rs 1.69 crore. Revenue for the financial year was Rs 6.34 crore against Rs 16.99 crore in the previous year. At the end of 2015-16, the company had accumulated losses of Rs 78.50 crore.

The company was referred to the Board for Industrial and Financial Reconstruction (BIFR) in October 2014. 

In its latest annual report, the company mentioned that due to non-availability of banking facilities, it could not enter into any new project business during the year under review and had to mainly depend upon maintenance jobs at Tata Steel, Jamshedpur. 

“The IPPL project at SAIL, DSP, is almost completed and commissioning certificate has been received,” said the annual report. 

The other project at SAIl, DSP, a WAP project, is in a stalemate due to an acute fund crunch. 

All these factors put together were the company’s reason to file for financial restructuring through the insolvency and bankruptcy code.

The company has a presence in engineering and construction services in a number of sectors, including metals, hydrocarbons, power and fertilisers. 

Life Insurance Corporation and Oriental Insurance Company are among its top shareholders.

The 70-year old company listed on the BSE has suspended trading.

The company did not respond to Business Standard’s mail on the issue.