State Bank of IndiaBSE 0.13 % (SBIBSE 0.13 %) has moved the National Company Law Tribunal (NCLT) against independent power producer East Coast Energy Pvt Ltd (ECEPL), which suffered project execution delays owing to funds constraints.
The Andhra Pradesh-based power producer had defaulted loans of over Rs 5,000 crore to many lenders led by Power Finance Corporation (PFC), which is also said to be preparing to move the Tribunal with an insolvency petition.
“East Coast Energy had defaulted over Rs 950 crore of loans to SBI and the lender has filed an application before the Tribunal seeking insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code 2016,” a person associated with the development told ET.
“For nearly the past two years, there is no activity at the project site with funds crunch following differences among the lenders on meeting the cost overruns. Subsequently, most of the top executives, including its managing director Tatineni Venkata Krishna, had left the company,” said a former top executive, requesting anonymity. “The promoters will lose heavily if the Tribunal initiates insolvency proceedings and decides to liquidate assets for recovery of dues.”
ECEPL was among few coal-fired power projects that faced violent public protests in the Srikakulam region of Andhra Pradesh last decade, delaying the clearances and subsequently affecting the project execution.
The project was promoted by Asian Genco, Cobalt Power, Athena Energy Ventures, Abir Infrastructure and PTC India Financial Services where the developer had proposed setting up a 1,320mw supercritical thermal power project near Kakarapalli village in Srikakulam district.
