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NCLT orders liquidation for Lanco Babandh

The bankruptcy court removed the resolution professional for the Lanco group company, and appointed a liquidator from AAA Insolvency Professionals to sell off the assets

, ET Bureau|
Dec 03, 2019, 10.06 PM IST
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MUMBAI: The National Company Law Tribunal has ordered the liquidation of Lanco Babandh Power, which means lenders stand to lose much of the more than Rs 8,000 crore of overdue from the thermal power producer.

The bankruptcy court removed the resolution professional for the Lanco group company, and appointed a liquidator from AAA Insolvency Professionals to sell off the assets.

“…a direction was issued to the RP (resolution professional) to submit approval of CoC (committee of creditors) members for liquidation of the corporate debtor,” the NCLT said in the order. The liquidator shall endeavour to first sell the corporate debtor or its business as a going concern, it added.

The company has two units with capacity of 660 megawatts each, on a facility spread over 1,396 acres in Odisha’s Dhenkanal district.

The stipulated term for the company’s corporate insolvency process ended on June 19. It was then extended until August 6.

Sterlite Power Transmission was the only bidder for the company during the process. But the NCLT said it did not submit a complete resolution plan after removing the shortcomings that the initial offer had.

The tribunal had admitted Lanco Babandh Power for bankruptcy proceedings more than a year ago, on a petition filed by ICICI Bank. Since then, financial creditors have made total claims of Rs 8,254 crore.

In August last year, the NCLT’s Hyderabad chapter ordered the liquidation of Lanco Infratech, after the infrastructure firm’s committee of creditors rejected a revised resolution plan from Thriveni Earthmovers.
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