An order for the initiation of insolvency resolution has been given against the Halol-Shamlaji Tollway by the National Company Law Tribunal (NCLT) as, towards the end of December 2018, the company has defaulted on the loan repayment of close to Rs 77 crores.
The petition to seek action under the Insolvency & Bankruptcy Code was moved by Oriental Bank of Commerce and will come as an embarrassment for L&T, one of the marquee names in the corporate sector. The road project was being developed by L&T Infrastructure Projects Development Company.
In November also there were reports that the lenders had attached an NPA tag to L&T’s Chennai-Tada Tollways but the company remained tight-lipped regarding the Halol- Shamlaji Tollways even though the banks continued complaining about it. The company kept on telling that the larger part of the problem was related to the government agencies which affect most of the developers in the country.
NCLT’s Chennai bench has appointed Anil Kumar Birla as the interim resolution professional to oversee the resolution process.
In the year 2009, the L&T Halol-Shamlaji Tollway had taken a loan which by 2016 had been classified as NPA. Various deals were also adopted by the company such as converting a part of the loan to equity. In February 2017, the lenders had also agreed to convert over 40% of the Rs 1,000 crores into equity. As part of the restructuring, the interest rate on the loans was also proposed to be reduced to 10% and the repayment period was to be extended.But Gujarat State Road Development Corporation, which had agreed to fund Rs 210 crores as equity out of the Rs 410 crore debt conversions, failed to do so.
