Insolvency heat: Lanco encashes suppliers' bank guarantees

Firm received Rs 470 cr from sub-suppliers in respect of various EPC projects

The insolvency move of bankers has created a ripple effect in the industry with Lanco Infratech, one of the companies in the Reserve Bank of India’s action list of 12, encashing bank guarantees of its suppliers. A similar predicament is faced by steel companies whose suppliers and customers both have rushed panic messages to them. 

Business Standard has reviewed letters written by Lanco to bankers of about half a dozen companies for encashing guarantees. Most of these suppliers like Pentair, Vaas, Intervalve, Kelvion and Emerson are not very big companies and the amount of bank guarantees is less than a