Chennai-based telecom tower company GTL Infrastructure, which owes over Rs 4,000 crore as loans to a consortium of banks led by Union Bank of India, has approached the Madras High Court challenging the action initiated against it under the Insolvency and Bankruptcy Code.
GTL Infra, after Chennai Network Infrastructure (CNIL) was merged with it, had a debt of Rs 13,318 crore, which stood at Rs 10,000 crore in April 2017.
After a strategic debit restructuring (SDR), the debt was reduced to Rs 4,841 crore.
Subsequently, the banks discontinued the restructuring scheme and downgraded the companies account as a 'Non-Performing Asset' (NPA).
A part of the loan was then converted as equity of the company to be sold to an Asset Reconstruction Company (ARC).
According to the petitioner, in February, Edelweiss Asset Reconstruction Company (EARC) jointly with the Bank of Merrill Lynch offered an initial bid of Rs 2,000 crore on a full cash basis against the outstanding dues of all the lenders including Canara Bank and UBI.
"Post negotiations, EARC also increased its bid to Rs 2,113 crore and then Rs 2,400 crore equivalent to the valuation submitted by the valuation agencies. All the lenders agreed for the offer and agreed to take up with their respective competent authorities for approval."
The petitioner claimed that the process of the sale got delayed due to the inordinate delay on part of the lenders in getting approval.
The petitioner submitted that to its shock on June 27 Canara Bank issued a letter saying the SDR "stands failed" as the company could not effect a change of management by sale of 51 per cent shareholding.
It was informed that account of the petitioner was retrospectively classified as NPA with effect from July 1, 2011.
Apprehending that the banks were proposing to seek resolution for the company by referring it to National Company Law Tribunal (NCLT) under the Bankruptcy Code, the company approached the court.
When the plea came up Monday, senior counsel for the company P S Raman alleged that while all other creditors were considering the sale proposal, Canara Bank has issued the letter with "malicious agenda" and wanted the court to pass interim order restraining the bank from approaching NCLT.
Refusing to grant any interim relief, Justice R Mahadevan wanted to know what security the company has for the outstanding debt.
The counsel said the company owns 28,000 mobile phone towers across the country.
"That is your business that cannot be said as a security for Rs 10,000 crore debt the firm owes," the judge said and directed Canara Bank and UBI to file their counter by September 10.
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