ICICI Bank has filed a case against Punj Lloyd, the international engineering procurement and construction company, in the National Company Law Tribunal (NCLT), New Delhi, for insolvency and bankruptcy proceedings.
The division bench headed by Justice M M Kumar has issued a notice to Punj Lloyd, saying the lender has moved the tribunal under the Insolvency and Bankruptcy Code (IBC).
ICICI Bank has filed the case against Punj Lloyd to recover dues of Rs 8.52 billion. However, the petition seeking initiation of insolvency proceeding against the corporate debtor was opposed by State Bank of India (SBI).
SBI disapproved the move on the grounds that the Reserve Bank of India’s (RBI) February 12 circular gave corporate debtors six months time to resolve their debt and Punj Lloyd still had time to seek an out-of-court settlement.
Legal representative of SBI told the NCLT that the company’s asset base only covered 5 per cent of its debt and there are 20 on-going projects, which are the only source of revenue for the company.
Further, the counsel for SBI said if insolvency proceedings against the company were initiated the projects would be halted. SBI is the leader of the lenders forum for Punj Lloyd.
Punj Lloyd is part of the RBI’s second list of non-performing assets (NPAs) that were notified for proceedings under the IBC and has a total debt of over Rs 60 billion.
The company specialises in providing services for energy, infrastructure and defence sectors and has operations across West Asia, Africa, the Asia Pacific, South Asia and Europe
Punj Lloyd’s stock price of the company fell 11 per cent from its closing price on the previous day to Rs 14.85, at the end of trade on the BSE.
The NCLT will hear the case on July 24.