National Company Law Tribunal, Chennai, admitted the application filed by State Bank of India (financial creditor) against Coastal Energen (corporate debtor), the power generating flagship company of the Dubai-based Coal and Oil Group to initiate Corporate Insolvency Resolution Process (CIRP) against the company, declare moratorium,and appoint an Interim Resolution Professional (IRP).
The company has defaulted an amount of ₹1,458 crore to SBI. The counsel for the bank submitted that the company had availed financial facilities from a consortium of 15 banks and financial institutions including the SBI and the erstwhile State Bank of Mysore, State Bank of Patiala and State Bank of Hyderabad for setting up of a coal-based thermal power plant with 1200 MW capacity at Tuticorin in Tamil Nadu.
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The original cost of the project was estimated to be ₹4,297 crore (with debt of ₹3,323 crore and equity of ₹859 crore). However, due to over-run, the project cost was revised to ₹7,870 crore (with debt of ₹6,296 crore and equity of ₹1,574 crore).
The order stated that the counsel for the company said that the corporate debtor is operating as a going concern and the plant is operating without further sanction of working capital by bankers. Further, it was submitted that the corporate debtor’s average turnover since 2017 has been ₹1,700 crore.
The applicant’s counsel said that the company is an NPA with the applicant and the amount of default was ₹1,458 crore. Respondent’s counsel could oppose this answer, the order said.
“Taking into consideration the facts and circumstances of the case as well as the position of Law, we are of the view that this application as filed by the applicant financial creditor – is required to be admitted,” the order said.
