 "IBC, insolvency, bankruptcy, NCLT, company, firms")
The resolution professional (RP) for the troubled GVK Gautami Power Ltd, a 471 MW capacity gas-based power plant in Kakinada district of Andhra Pradesh, has sought Expression of Interest (EOI) from corporates, finance firms, and Asset Reconstruction Companies (ARCs).
The financial creditor, Edelweiss Asset Reconstruction Company Limited, had filed a petition to initiate a Corporate Insolvency Resolution Process (CIRP) against GVK Gautami Power for allegedly defaulting on payment of a debt of Rs 1,447 crore. This covered the principal and interest. Edelweiss also sought a moratorium and the appointment of a Resolution Professional.
The National Company Law Tribunal (NCLT), Hyderabad bench, during its hearing on October 20, 2023, initiated insolvency proceedings against the ailing power unit under The Insolvency and Bankruptcy Code (IBC). Anil Kohli is the resolution professional overseeing the entire process, including resolution under IBC.
The liquidity position of the company continued to remain stretched on account of the plant being non-operational, resulting in delays in debt servicing. The plant has not been operational since May 2015. However, the plant is duly maintained. The company had entered into a Power Purchase Agreement (PPA) with Power Distribution Companies of Andhra Pradesh (APDISCOMs) on March 31, 1997. The PPA was approved by the Andhra Pradesh Electricity Regulatory Commission. Furthermore, the corporate debtor had entered into several agreements with GAIL, Reliance Industries, etc., for fuel.
Setting out eligibility terms, the resolution professional said the corporates and individuals intending to apply need to have a minimum net worth of Rs 10 crore and above. For financial entities, including ARC and finance firms, the minimum assets under management or committed funds available for investment should be Rs 100 crore and above. The participation of ARCs is subject to rules and regulations of the Reserve Bank of India. The last date for submitting the resolution plans is March 6, 2024.
