NCLAT Puts Coastal Energen Resolution Plan on Hold Amidst Allegations of Irregularities
The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) has stayed the implementation of the resolution plan for Coastal Energen, a power generation company, amidst allegations of irregularities in the bidding process.
NclatCoastal EnergenAdani PowerDickey Alternative Investment TrustInsolvency And Bankruptcy CodeReal EstateSep 07, 2024
However, the order was challenged by ex-promoter AR Buhari, who alleged 'glaring irregularities' in the way the resolution plan was approved by the lenders. Buhari contended that Adani Power piggy-backed Dickey Alternate Investment Trust to get a back-door entry into the bidding process after Adani's expression of interest (EoI) was rejected by the resolution professional (RP) for delayed submission.
The NCLT order was also criticized for allowing DAIT, which did not meet the minimum financial and experience requirements stipulated in the bidding documents, to participate in the bidding process. This raised compliance concerns and cast doubts on the transparency of their bid.
It is worth noting that former promoter of Coastal Energen, AR Buhari, has been arrested by the Enforcement Directorate under the Prevention of Money Laundering Act (PMLA), 2002, in a case of overvaluation of coal prices.
The resolution plan proposed an upfront payment of Rs. 3335.52 crores, excluding CIRP costs, within 60 days from the date of approval. Of this amount, DAIT would contribute Rs 1,700 crores and Adani Power would contribute Rs 1,630.88 crore. Financial creditors would receive Rs 3,335 crore, which is 28.52% of their total claim of Rs 11,678 crore. Operational creditors would receive a sum of Rs 4.64 crore. A sum of Rs 109 crore has been set aside as CIRP cost.
The NCLAT has ordered status quo until the next hearing on September 18, 2024.
Also See Adani Power acquires yet another energy company through CIRP
Frequently Asked Questions
What is the status of the resolution plan for Coastal Energen?
The implementation of the resolution plan has been stayed by the NCLAT amidst allegations of irregularities in the bidding process.
Who are the parties involved in the resolution plan?
The parties involved are Dickey Alternative Investment Trust (DAIT), Adani Power, and ex-promoter AR Buhari.
What are the allegations against Adani Power?
Adani Power is alleged to have piggy-backed Dickey Alternate Investment Trust to get a back-door entry into the bidding process after its expression of interest was rejected.
What is the amount proposed in the resolution plan?
The resolution plan proposes an upfront payment of Rs. 3335.52 crores, excluding CIRP costs, within 60 days from the date of approval.
What is the next hearing date in the case?
The next hearing is scheduled for September 18, 2024.
Tags:
Related News Articles
Unsold Inventory in Real Estate Sees Significant Decline: A 31% Reduction in Selling Time
The real estate market is witnessing a turnaround, with unsold inventory reducing by 31% since 2019, leading to a significant decline in selling time.
NAREDCO Maharashtra and 1 Finance Shed Light on Greater Mumbai’s Real Estate Market
A joint report by NAREDCO Maharashtra and 1 Finance reveals high property prices and low affordability in Greater Mumbai's real estate market, underscoring the need for regulatory reforms and collaborative efforts to address the challenges.
Kalpesh Maroo: A Distinguished M&A and Tax Expert at KPMG International
Kalpesh Maroo brings over two decades of experience in private equity and corporate M&A. His expertise spans divestitures, mergers, and acquisitions, as well as business re-organizations for leading Indian and multinational companies.
Starwood Property Trust Secures $500M in Senior Notes
Starwood Property Trust (NYSE:STWD), a $6.5 billion market cap real estate investment trust, has successfully issued $500 million in senior notes amid challenging market conditions. The company, currently trading near its 52-week low at $19.30, aims to st
Why Housing is No Longer a Wise Investment for the Indian Middle Class
The Indian real estate market is facing significant challenges, making it less viable for middle-class families. Here's why housing is no longer a smart investment for them.
Chris Wood Adjusts RIL Weightage in India Portfolio: Key Changes Explained
Market veteran Chris Wood of Jefferies has made significant changes to his long-only portfolios, including a notable increase in the weightage of Reliance Industries (RIL) in his India portfolio. Discover the other key adjustments and their implications in this detailed analysis.