New Delhi: Lanco Infratech, one of India’s 12 biggest debt defaulters that was pushed to the bankruptcy courts by the Reserve Bank of India last year, has said that a panel of its lenders was not able to approve an insolvency resolution plan and a bid submitted by Thriveni Earthmovers.The resolution professional, therefore, will file a necessary application before the National Company Law Tribunal for liquidation of the company.Lanco Infratech owes over Rs 50,000 crore in dues to its lenders.“A resolution plan submitted by Thriveni Earthmovers Private Limited was presented by the Resolution Professional for the approval of the committee of creditors (CoC)/ in accordance with the Insolvency and Bankruptcy Code, 2016 and the rules and regulations framed thereunder,” the company noted in a stock exchange filing.“On account of less than 75% of the votes being cast in favor/the aforementioned approval of the CoC could not be obtained,” it added.According to people with knowledge of the matter, only 16% of the votes were in favour of accepting Thriveni Earthmovers’ proposal. Thriveni, according to sources, had offered roughly Rs 1,500 crore in cash and would assume liability for Rs 38,000 crore of debt at the subsidiary level.The 270-day insolvency resolution deadline for Lanco – which has business interests in everything from power to infrastructure – ends tomorrow (May 4, 2018).“The corporate insolvency resolution period expires on May 4, 2018, the necessary application is being filed by the Resolution Professional with the Hon’ble National Company Law Tribunal (NCLT)/ Hyderabad Bench, for liquidation of the company, or for any other direction which the Hon’ble NCLT may deem fit on account,” the notification states.The leading lender to Lanco is ICICI Bank, with an exposure of Rs 7,380 crore, followed by IDBI Bank (Rs 3,608 crore). The company was referred to the NCLT in August 2017.“Approximately anywhere between Rs 43,000 crore and Rs 45,000 crore owed to banks will be lost. It is better to opt for liquidation rather than accept a low bid and risk an investigation by authorities later,” a senior banker with knowledge of Lanco’s insolvency process told The Wire.The bidding phase for Lanco Infratech generally saw limited interest. Most other suitors – which allegedly included US energy firm Penn Energy, Solarland China and Kalyani Developers – were interested in in buying parts of the company’s assets in a piecemeal fashion but not as a whole.Substantial haircutsThe case of Lanco Infratech, where lenders are wary of accepting resolution proposals that involve significant haircuts of upwards of 75% of the debt amount, is likely to be seen in ABG Shipyard and Alok IndustriesThe Economic Times reported last week that bids have been rejected for both companies. While Alok owes nearly Rs 30,000 crore to its lenders, its liquidation value will be around Rs 4,500 crore.In the case of ABG Shipyard, which owes Rs 18,539 crore, its liquidation value is pegged at Rs 2,200 crore. While one bidder, UK-based Liberty House, has offered double the liquidation value (Rs 5,400 crore), its eligibility is under question given that it needs to repay its own overdue loans.
