IFCI has filed the petition against the Kolkata-based company under Section 7 of the Insolvency and Bankruptcy Code (IBC).
State-run lender IFCI has filed an insolvency petition against Jai Balaji Industries (JBIL) at the Kolkata bench of the National Company Law Tribunal (NCLT), seeking the initiation of corporate insolvency process against the steelmaker over unpaid dues. IFCI has filed the petition against the Kolkata-based company under Section 7 of the Insolvency and Bankruptcy Code (IBC). The company’s name reportedly featured in the RBI’s second list of large corporate loan defaulters.
JBIL, the flagship company of Jai Balaji Group, as in March 2017 defaulted on repayment of loans and interest to banks and financial institutions to the tune of Rs 390.93 crore and Rs 161.12 crore, respectively, according to the company’s latest annual report.
The company said during the quarter ended June 2017, it has not provided for interest amounting to Rs 106.72 crore on various credit facilities and loans from banks and financial institutions of the accounts, which have been classified as non-performing assets (NPAs).
Lenders to the company include State Bank of India, Punjab National Bank, IFCI, Indian Overseas Bank, IDBI Bank, Federal Bank, UCO Bank, Allahabad Bank and United Bank of India.
On Tuesday, the matter was heard by a division bench of the tribunal, comprising Justices Vijai Pratap Singh and Jinan KR. The bench adjourned the matter till October 11.
In FY17, Jai Balaji Industries had reported a net loss of Rs 218 crore on the back of Rs 1,564 crore in revenues.
According to the latest annual report, the steelmaker has been incurring losses due to unfavourable market conditions and other adverse industry scenario for the past few years. The accumulated losses of the company as on March 31, 2017 stands at Rs 1,850.42 crore. The firm had made a reference to the Board for Industrial and Financial Reconstruction (BIFR) in terms of the provision of Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).
The company had applied for restructuring of its debts, under the corporate debt restructuring (CDR) mechanism. The CDR Empowered Group approved the restructuring in August, 2012 and the CDR Cell issued the letter of approval (LOA) in September, 2012. The master restructuring agreement (MRA) incorporating the terms of the LOA was signed with the lenders in September, 2012, and a supplementary MRA was executed in January, 2013.
The company’s scrip on the BSE closed at Rs 11.60 on Tuesday, down 2.52% from the previous close.
The Reserve Bank of India had sent its first list of 12 defaulters to their creditors in June this year for the quick launch of resolution proceedings at the NCLT under IBC.
