ICICI Bank Ltd on Thursday moved the National Company Law Tribunal (NCLT) against Punj Lloyd Ltd seeking initiation of insolvency proceeding under the Insolvency and Bankruptcy Code (IBC) for recovery of outstanding dues of Rs852 crore.
A two-judge NCLT bench headed by M. M. Kumar issued a notice to Punj Lloyd.
At 2.16pm, Punj Lloyd shares were down 10.78% at Rs14.90. In intraday trade, the stock plunged as much as 15.26% to Rs14.15.
ICICI Bank’s plea was, however, opposed by State Bank of India (SBI) on the ground that the six months period granted to corporate debtors for debt resolution outside IBC as per the 12 February circular of the Reserve Bank of India was yet to expire.
SBI is the leader of the lenders forum for Punj Lloyd.
Punj Lloyd’s asset base covers only 5% of the company’s debt and the 20 ongoing projects are the only source of money for the company, which would be halted if insolvency proceeding is initiated, SBI told the tribunal.
Punj Lloyd belongs to the so-called second list of non-performing assets recognized by RBI last year and has a total debt of over Rs6,000 crore.
The matter would be next heard on 24 July.
This article was first published on Livemint.com