NCLT rejects Essar Power Jharkhand promoter's proposal to settle dues

The National Company Law Tribunal has rejected Rs 1,200 crore offer by the former promoters of Essar Power Jharkhand Ltd (EPJL) for one-time settlement with the lenders and take the debt-ridden company out of insolvency proceedings.

After the Committee of Creditors (CoC) of EPJL, in which leading private sector lender ICICI Bank has over 90 per cent voting rights, declined Rs 1,200 crore settlement proposal against a total debt ranging around Rs 5,600 crore, a two-member principal bench of NCLT headed by President Justice M M Kumar rejected promoter's offer.

"A proposal made by the ex-promoter/director pursuant to the direction issued on March 11, 2019 and subsequently clarified by filing one affidavit dated May 16, 2019 does not find favour of the ICICI Bank - Financial creditor who constitutes 99.34 per cent voting share of the CoC," said NCLT.

It further said: "There are plausible reasons given for not accepting the proposal. Accordingly, we are unable to accept any such proposal and the same is hereby rejected."