Safeguard duty row leaves Moser Baer Solar resolution in limbo

The resolution plan for Moser Baer Solar is in limbo as the bidders are awaiting a clarity on the safeguard duty on imported solar cells, which is pending at the Odisha High Court.

"Since the matter about the safeguard duty on solar cell imports from China and Malaysia is pending in the Odisha High Court, companies who had expressed interest in Moser Baer Solar are in a wait-and-watch mode," resolution professional Arvind Garg told PTI.

He said they had received a decent response, mainly from domestic players even after the extension of deadlines for inviting bids for the assets of the solar cells manufacturing firm.

"However, they are now waiting for clarity on the entire issue. Till the court delivers it verdict, we will have to wait," Garg added.

On a petition filed by Acme Solar Holdings, the Odisha High Court had on July 23 ordered that the Central government should not issue any notification to impose the duty.

The Union revenue department, however, imposed the safeguard duty for two years effective July 30 after the Indian Solar Manufacturers Association filed an application late last year, saying the domestic industry sustained heavy losses due to a surge in solar cell imports, mostly from China and also from Malaysia.

In mid-July, the Directorate General of Trade Remedies (DGTR) had recommended slapping a 25 per cent safeguard duty on solar panels and modules imported from China and Malaysia for a year, followed by 20 per cent duty for the next six months and 15 per cent duty for another six months.

Meanwhile, the Madras High Court has permitted Shapoorji Pallonji Infrastructure to get its consignment of panels from overseas released by the Customs at Chennai port without paying any duty.

The DGTR, while imposing the duty had said the step was needed to protect the domestic solar manufacturing industry.

Nearly 90 per cent of solar panels and modules used in the country are imported from China and Malaysia since the local capacities are inadequate to meet the rising demand and the equipment is significantly costlier.

Moser Baer Solar was dragged to the National Company Law Tribunal under the Insolvency and Bankruptcy Code by the state-run Central Bank of India after it defaulted on over Rs 114-crore loan. The tribunal allowed the insolvency plea in November 2017.

When the case was admitted, the tribunal had appointed Ritu Rastogi as the interim resolution professional and the board was suspended in November 2017.

Moser Baer Solar, which was set up in 2005-07, has crystalline cells capacity of 185 mw, the crystalline modules capacity is 200 mw and thin film modules of 50 mw, but it and has an infrastructure to scale it up to develop 500 mw.

Its financial stress increased following rising imports from China. The company had sought restructuring of its Rs 956 crore debt way back in 2012-13, but the recast plan had failed in October 2016. It ships to over 38 countries.