GVK Power & Infra lands in insolvency

GVK Power and Infrastructure Ltd (GVKPIL) will face insolvency proceedings for failure to pay loans to lenders, a corporate insolvency court NCLT has said.

The city bench of National Company Law Tribunal (NCLT) issued the order on a petition of lenders’ group led by ICICI Bank Ltd, GVKPIL said in a stock exchange filing. The loan was originally availed of by GVK Coal Developers (Singapore) Pte Ltd over a decade ago, for which GVKPIL acted as a guarantor. The NCLT bench issued the order on July 12, which was made public on Monday.

The petition was filed by ICICI Bank in 2022. NCLT appointed Satish Kumar Gupta as an interim resolution professional for managing the company during pendency of the insolvency. “The corporate debtor has acknowledged its liabilities and admitted the factum of corporate guarantee in its annual reports for the FYs 2018-19, 2019-20, and 2020-21.

As on June 13, 2022, the borrower was liable to pay $1.84 billion comprising principal amount of $1.13 billion, interest of $731.57 million and agency fee of $144,000,” according to the NCLT order, which was made public by GVKPIL in the stock exchange filing. Senior counsel K Vivek Reddy, representing ICICI, referenced a London court judgment from October of the previous year to support the insolvency proceedings against GVKPIL. “The first default occurred in February 2017 and remains unresolved. GVKPIL, as the guarantor for the loan taken by GVK Coal, is liable.