Indian banks are estimated to have recovered almost Rs 70,000 crore from various companies through bankruptcy resolution processes during the year through March 2019. That's nearly twice the amount recovered the year before through other resolution mechanisms such as debt recovery tribunals and Lok Adalats, according to a Crisil report.
Many banks have reported lower bad loans for the fiscal fourth quarter through March, and several bank chiefs have pointed out that promoters of debt-laden companies are coming forward for one-time settlement of loans fearing they would lose control.
In the stressed assets segment this week, bankers continued to try to revive Jet Airways (India) Ltd while Maiyas Beverages is set to be acquired by a company backed by its old owner. Meanwhile, state-run NBCC (India) Ltd is set to renegotiate its bid for Jaypee Infratech Ltd.
Jet Airways
The grounded airline saw multiple exits this week with its chief executive officer and at least two others tendering their resignations. This may prompt Jet's lead lender State Bank of India to seek a court-appointed receiver to manage the affairs of the cash-strapped airline.
The top management's exodus and the absence of any firm or binding bids means Jet is likely heading for the bankruptcy court.
Meanwhile, SBI Capital Markets Ltd, the investment bank mandated to look for buyers for the airline, held talks with unsolicited bidders including Mumbai-based Darwin Platform Group of Companies, London-based AdiGro Aviation and UK-based entrepreneur Jason Unsworth.
Maiyas Beverages
A company backed by food entrepreneur Sadananda Maiya is set to take over Maiyas Beverages & Foods Pvt. Ltd, which he had earlier founded and which was dragged to bankruptcy court last year.
Akashika Foods Pvt. Ltd will take over Maiyas Beverages after the National Company Law Tribunal (NCLT) dismissed MTR Foods Pvt. Ltd’s allegations against the ready-to-eat packaged food maker. The Rs 130-crore plan by Akashika Foods proposed 100% upfront payment to financial creditors, employees and corporate debtors.
Both MTR and Akashika Foods, formed by former employees of Maiyas Beverages, had bid for the debt-laden company. Other suitors were Sanjeev Goenka’s Guiltfree Industries, Haldiram’s Kamal Agrawal and Peepul Capital.
Dighi Port
The Mumbai bench of the NCLT approved a resolution plan by government-owned Jawaharlal Nehru Port Trust (JNPT) to buy debt-laden Dighi Port Ltd and rejected pleas by other suitors including an Adani Group company.
The court, however, dismissed the JNPT’s requests to waive stamp duty and some other taxes and allow some other concessions. The tribunal also asked the port operator to submit its acceptance of the conditional approval of the resolution plan by May 27.
Jaypee Infratech
An appellate tribunal on Friday annulled voting by Jaypee Infratech's committee of creditors on NBCC's bid to acquire the debt-laden developer.
The National Company Law Appellate Tribunal (NCLAT) was responding to a plea by IDBI Bank seeking a stay or annulment of the voting process. The bank is the biggest lender to the cash-strapped real estate company and has an 18% voting share. It had opposed the bid saying the offer was conditional upon the grant of approval to transfer Jaypee unit Yamuna Expressway’s business to NBCC.
The lenders will now have to conduct fresh voting from May 31.
Era Infrastructure
The NCLT's principal bench in New Delhi dismissed a petition by ICICI Bank to begin insolvency proceedings against Era Infrastructure India Ltd on the grounds that the lender was already claiming its dues in insolvency proceedings against the company’s parent and corporate guarantor Era Infra Engineering Pvt. Ltd.
“Therefore, on account of duplicacy of the claims, the petition cannot be entertained," the NCLT said in an order dated May 7.
Era Infra is one of the 12 companies against which the Reserve Bank of India had directed banks to start insolvency proceedings two years ago. Proceedings against Era Infra started last year after which the interim resolution professional Rajiv Chakraborty rejected ICICI Bank’s claims as a financial creditor. His decision was overturned by the NCLT in December.
According to the NCLT order, ICICI Bank had lent Rs 200 crore to Era Infrastructure India in 2011. Loans were also given to parent Era Infra Engineering’s related companies including Hyderabad Ring Road Project Pvt. Ltd, Apex Buildsys Ltd, Dehradun Highways Project Ltd, Gwalior Bypass Project Ltd.
