The bankruptcy court Monday admitted GVK Power (Goindwal Sahib) Ltd for corporate resolution and insolvency proceedings based on a petition filed by Axis Bank. This is the second company of the GVK group, after GVK Industries to be admitted for insolvency proceedings.
The Hyderabad bench of the National Company Law Tribunal (NCLT) gave an oral judgement on Monday, while a complete judgement order is yet to be uploaded on its website.
GVK Power and Infrastructure Ltd, the parent company of GVK Power (Goindwal Sahib), informed the stock exchange that it would challenge the order at the National Company Law Appellate Tribunal. The company has a debt of around Rs 3000 crore, said a senior bank official.
If the appellate authority does not grant any relief, the interim resolution professional will immediately take charge of the company’s affairs, the parent company disclosed to the exchange.
GVK Power (Goindwal Sahid) operates two thermal power plants in Punjab of 270mw each. It has a power purchase agreement (PPA) with Punjab State Power Corporation Ltd. GVK Power has tied up with Coal India for the supply of coal under Shakti Policy.
In October last year, the state government terminated GVK on the grounds that its charges a higher tariff. The termination of PPA by the then Congress government was an election promise made by the state government. The Punjab state had signed PPA with GVK Power when Shiromani Akali Dal – BJP was in power. The cancellation of PPA resulted in a series of litigations between the company and the state government.