The dedicated bankruptcy court has admitted an insolvency plea filed by India’s third largest private sector lender Axis BankNSE -0.35 % against Valecha LM Toll, a subsidiary of infrastructure NSE 0.27 % firm Valecha Engineering, for defaulting on about Rs 105-crore loans.
Axis Bank had given term loans of Rs 100 crore to the company in November 2010. However, the company was declared a Non Performing Asset (NPA) in November 2016.
“The lender has annexed the annual report for the year ending March 2017 to show that liability has been admitted by the company and to show that the erosion of substantial net worth raises doubt about the company’s ability to continue as a going concern,” said the NCLT bench presided over by VP Singh and Ravikumar Duraisamy.
The tribunal has also appointed Udayraj Patwardhan as interim resolution professional (IRP) for the resolution of the company.
“During one of the hearings, the corporate debtor stated that it does not oppose the admission of the petition,” observed the tribunal in its order.
Valecha LM Toll is primarily a road infrastructure company that works on the ‘build, operate and transfer’ (BOT) model.
To reduce debt, the Mumbai-based civil engineering firm Valecha Engineering had decided in 2014 to sell its three road assets Valecha LM Toll to US-based New Generation Infrastructure Inc, a subsidiary of New Generation Holdings Inc, for .?309 crore ($50.3 million), said a stock market disclosure.
Source: Economic Times