Co law tribunal okays insolvency process against Jyoti Structures

The National Company Law Tribunal has approved insolvency process against Jyoti Structures Ltd after State Bank of India moved the tribunal following non-payment of dues of up to 17.45 bn rupees.

Jyoti Structures is one of the first large non-performing assets against which the Insolvency and Bankruptcy Code was invoked in compliance with the Reserve Bank of India's mandate of Jun 13.

The tribunal has appointed an insolvency resolution professional to oversee the process. The tribunal initiated the insolvency process as the bank had proved the default in repayment by the company. SBI had filed application against the company following the central bank's directive on June 15.

In 2012, Jyoti Structures had taken loans of around 21.25 bn rupees from SBI and State Bank of Hyderabad, which was merged with SBI in April, for working capital needs. The loan amount was at 17.45 bn rupees after it was restructured under the master restructuring agreement in 2014. It has also accepted Jyoti Structure's request to allow promoters and investors to present investment proposals before the panel of creditors, which would be formed shortly.

The company, which engages in setting up power transmission lines, told the tribunal that it was in talks with some investors who are looking to buy stake in it. Apart from SBI, the list of 20 bankers to the company include Bank of India, ICICI Bank, Standard Chartered Bank and IndusInd Bank. Earlier, the Reserve Bank of India had directed banks to take action against 12 large bad loan accounts, which form around 25% of the total non-performing assets in the banking system.

Banks have already started proceedings against Electrosteel Steels, Lanco Infratech, and Monnet Ispat among others.