NCLT admits Bank of India's insolvency plea against RInfra arm GF Toll Road
This story was originally published at 20:30 IST on 23 October 2024
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NEW DELHI – The Mumbai bench of the National Company Law Tribunal Wednesday admitted a petition by Bank of India to start insolvency proceedings against Reliance Infrastructure Ltd.'s subsidiary G.F. Toll Road Pvt. Ltd., for an unpaid amount of INR 730.87 million. The tribunal appointed Rahul Jindal as the interim resolution professional of the debt-ridden company to carry out the functions under the Insolvency and Bankruptcy Code, 2016.
"It is clear that the corporate debtor is in default of a debt due and payable and the default is in excess of minimum amount stipulated under section 4(1) of the IBC...In view of this, this adjudicating authority admits this petition and orders initiation of CIRP (corporate insolvency resolution process) against the corporate debtor," the tribunal said. It directed a moratorium against G.F. Toll Road under Section 14 of the Code.
Bank of India had sanctioned a term loan of INR 1.50 billion to G.F. Toll Road, out of the total consortium amount of INR 5.84 billion. The loan was granted for capital expenditure purposes in respect of upgradation and widening of Gurgaon-Faridabad and Ballabgarh-Sohna road on a build, operate and transfer basis in Haryana. Bank of India acted as the lead bank of a consortium consisting of Indian Bank, Axis Bank, Bank of Baroda, Union Bank of India, and other banks.
Bank of India claimed that G.F. Toll Road had failed to maintain financial discipline and the bank was constrained to classify the account of the infrastructure company as a non-performing asset in 2018. Since the debt remained unpaid, in June 2023, a notice demanding the amount in default was sent to G.F. Toll Road. Thereafter, the bank moved the tribunal to start insolvency proceedings against G.F. Toll Road.
On Wednesday, shares of Bank of India ended 1.0% lower at INR 98.91 on the National Stock Exchange, while those of Reliance Infrastructure ended 5.0% higher at INR 267.25. End
Reported by Surya Tripathi
Edited by Tanima Banerjee
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