Lenders to invite bids for Hiranmaye Energy in the next few weeks

BHEL had petitioned to halt the insolvency process of the project, citing its pending dues emerging from an arbitral award

West Bengal-based Hiranmaye Energy, which was admitted for insolvency in January this year, is hoping to tide over initial differences among some creditors to kick-start the resolution process soon. 

The lenders of the Hirnamaye Energy Limited (HEL) would invite bids for the beleaguered thermal power company in the next few weeks, sources said.

The company was admitted into insolvency on a petition filed by state owned non-banking financial company REC Ltd. The total debt of the thermal power company is to the tune of Rs 2,000 crore.

The National Company Law Appellate Tribunal in March had set aside a petition by Bharat Heavy Electricals Limited (BHEL) seeking to halt REC from initiating insolvency proceedings against Hiranmaye Energy.

The financial creditors of the Hiranmaye project said with BHEL being asked to not interfere in the ongoing resolution process, they are hopeful of calling for bids soon. 

“We are hopeful of restarting the bidding process soon now that the air is clear. BHEL’s dues would be considered as part of the insolvency process,” said an executive. 

State-owned manufacturing major BHEL had petitioned to halt the insolvency process citing its pending dues emerging from an arbitral award.

The company said BHEL is liable to pay close to Rs 380 crore in view of losing an arbitration case filed by HEL to recover its pending payment. 

The case dates back to 2010 when BHEL was awarded the engineering, procurement and construction tender for the HEL power project.

The construction was delayed as the project could not attain financial closure for four years. BHEL said the project wasn't commissioned till 2017 due to the delays. BHEL dragged HEL to arbitration to recover the pending payment. The manufacturing major last year in August had contested the insolvency process citing recovery of its dues. 

The 750 Mw project located in Haldia, West Bengal is owned by the Kanoria family group. The company was dragged to insolvency by the financial creditors REC Ltd and PFC Ltd over unpaid debt of Rs 1800 crore. The proceedings were halted after BHEL intervened. 

However, under IBC “waterfall mechanism” the proceeds are distributed in a specific sequence, starting with secured creditors, followed by preferential creditors, and then unsecured creditors.

In the current case, BHEL is among the unsecured or operational creditors category. 

BHEL could not be reached for a comment.