In a partial relief to listed realty developer Housing Development & Infrastructure Ltd (HDIL), the National Company Law Appellate Tribunal (NCLAT) on Tuesday stayed the constitution of a committee of its creditors.
A division bench presided over by Justice SJ Mukhopadhaya and also comprising justice AIS Cheema and technical member Kanthi Narahari directed HDIL’s lead lender, Bank of India, to file its reply to the realty firm’s plea, challenging the National Company Law Tribunal’s order to commence corporate insolvency resolution process against it. The bank has to file the response within 10 days and the appellate tribunal will hear the matter next on September 26.
Subir Kumar, an advocate representing HDIL, confirmed the development but refused to divulge any details since the matter is sub judice.
The NCLT had asked the company’s financial creditors and homebuyers to submit their claims against the company by September 8. Setting up of the committee of creditors is one of the early processes after the NCLT orders insolvency and bankruptcy proceedings against a company. The committee decides on potential bids by other companies to revive the company.
While Sarang Wadhawan, managing director, HDIL confirmed the development, Bank of India didn’t respond to ET’s emails seeking comment until press time Tuesday.
ET was the first to report the NCLT’s earlier decision to admit insolvency proceedings under the provisions of the Insolvency & Bankruptcy Code (IBC) against the developer, on a plea filed by Bank of India.
The state-run bank had filed the application with the Mumbai bench of the NCLT after HDIL failed to repay dues worth Rs 522 crore. HDIL also faces resolution pleas filed by by Corporation Bank, Syndicate Bank, Indian Bank and Dena Bank.
The NCLT bench had approved the name of Abhay Narayan Manudhane as the interim resolution professional to carry the functions and proceedings of HDIL under the IBC. It had also restrained the company form transferring, encumbering, alienating or disposing of any of its assets or any legal right or beneficial interest therein until the resolution process is completed.
Last year, HDIL had settled two similar bankruptcy petitions by Jammu & Kashmir Bank and Andhra Bank, paying them Rs 334 crore and Rs 40 crore, respectively.
HDIL, engaged in slum rehabilitation projects in Mumbai, has total debt of about Rs 1,990 crore as on June end, as per the last reported quarterly earnings.On a recent investor conference call, HDIL announced that it has reduced the debt and would focus on shedding loans further in the next three quarters.
Last quarter, HDIL said it reduced debt by about a fifth as both consolidated and standalone entities, in line with its guidance.
HDIL reported a 67% on-year decline in net profit in the quarter ended June 30, at Rs 8.24 crore. Total income fell 44% to Rs 96.50 crore.
Source- Economic Times.