Transstroy India heads for insolvency resolution
The National Company Law Tribunal, Hyderabad Bench, has admitted a petition for insolvency against Transstroy (India) Ltd initiated by Canara Bank.
While declaring a moratorium, with effect from October 10, till the completion of the Corporate Insolvency Resolution Process or until the Bench approves the Resolution Plan, the Judicial Member Ratakonda Murali appointed Govindrajulu Venkata Narasimha Rao as interim resolution professional to carry out the functions under the Insolvency and Bankruptcy Code.
The petitioner bank stated that it had sanctioned ₹125 crore under fund based working capital limits and ₹600 crore under non-fund based working capital limits, which include bank guarantees of ₹500 crore and letter of credit of ₹100 crore, aggregating ₹725 crore.
It contended that Transstroy defaulted its payments to the bank and that the petition was filed seeking direction of the Tribunal to initiate Corporate Insolvency Resolution Process (CIRP) against Transstoy and find a resolution plan.
The company is engaged in execution of irrigation and road projects and completed several BOT road projects and the fifth one was under construction. The company is also executing a contract of ₹5,788 crore in the mega Indira Sagar Polavaram Project in Andhra Pradesh through a joint venture firm.
The petitioner bank also stated that two of the properties of Transstroy in Hyderabad have been acquired by Special Deputy Collector through land acquisition for metro projects and a compensation of ₹150 crore was pending.