The National Company Law Tribunal (NCLT) Thursday allowed KSK Mahanadi Power Company Ltd’s committee of creditor (CoC) to invite fresh bids for the company.
The tribunal dismissed Megha Engineering & Infrastructure Ltd’s application objecting to the CoC’s decision to call for fresh bids as the first round of bidding had already received interest from 12 prospective resolution applicants. “Application is without merit and frivolous and dismissed with costs,” the tribunal said.
The resolution professional (RP) of KSK Mahanadi had argued that the change of circumstance-KSK Mahanadi undergoing corporate insolvency resolution process (CIRP) on a standalone basis requires fresh bidding.
In April, the NCLT lifted a stay on the CIRP of KSK Mahanadi, backing the decision of the CoC that had approved KSK Mahanadi’s CIRP as a separate entity rather than combining it with other two entities of KSK Mahanadi that are also undergoing CIRP.
Earlier, the lenders favoured a collective CIRP, hoping it would fetch them better value for the three entities. The other two entities were KSK Mahanadi Water and Raigarh Champa Rail.
Megha Engineering’s counsel contended that RP had failed to provide a reason for fresh bidding and violated rules under the Insolvency and Bankruptcy Code, 2016 (IBC) by not seeking NCLT’s nod before inviting a fresh round of bidding.
Further, the counsel pointed out that all prominent power companies such as Adani Power, Jindal Power and Vedanta Ltd have already submitted their bids in the first round.
The tribunal was wary of interfering with the CoC’s commercial wisdom unless the CoC’s decision was capricious or arbitrary. The second round of bidding has drawn the likes of Coal India Ltd and NTPC Ltd to the CIRP of KSK Mahanadi Power.
