NCLAT directs distribution of ITNL entity’s lenders, to pay 75% to BKEL
SBI had requested the NCLAT to allow the interim distribution of Rs 175 crore to the secured lenders out of funds lying in the escrow account of BKEL
The National Company Law Appellate Tribunal (NCLAT) has ordered an interim payment of 75 per cent of the total amount deposited in an escrow account to lenders of Baleshwar Kharagpur Expressway Limited (BKEL), promoted by IL&FS Transportation Networks Ltd (ITNL).
Passing an order over the plea filed by the State Bank of India, NCLAT said it failed to see any reasonable grounds for not taking any decision by the Board for an interim distribution, as per the Concession Agreement and the Escrow Agreement.
“Interim distribution shall be made to the lenders of 75 per cent of the amount lying in the escrow account as per the Escrow Agreement,” said NCLAT in its order.
The balance amount is to be used for operations, maintenance and other payments.
SBI had requested the NCLAT to allow the interim distribution of Rs 175 crore to the secured lenders out of funds lying in the escrow account of BKEL.
BKEL did not service its loan after January 31, 2020, and Rs 236.82 crore was lying in the company’s escrow account as of September 14, 2023.
In the consortium meeting, the lead bank as well as other banks requested for an interim distribution of cash available with the company.
BKEL is a special-purpose vehicle promoted by ITNL for the development of road project in the Baleshwar-Kharagpur section of NH-60 in Odisha and West Bengal.
A concession agreement was executed between NHAI and BKEL on April 24, 2012. BKEL availed financial facilities from the State Bank of Patiala and two other banks namely Allahabad Bank and IL&FS Financial Services.
After the State Bank of Patiala merged with the SBI, SBI became the lead bank under the Common Loan Agreement. Over the period, BKEL has been sanctioned a term loan of Rs 396 crore out of which around Rs 146 crore was sanctioned by SBI.
Allowing the plea, NCLAT said: “When the amounts to which lenders are entitled, which is accumulated in the escrow account and distribution of amount, which has accumulated with the various IL&FS entities has already been directed to be distributed on an application filed by the Union of India, we fail to see any reasonable ground for not taking any decision by the board for interim distribution, as per the Concession Agreement and the Escrow Agreement.”
ITNL is part of the debt-ridden IL&FS Group.
On October 1, 2018, NCLAT superseded the board of IL&FS on the recommendation of the Centre after the mega crisis in IL&FS, which shook the finance industry.
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First Published: Sep 22 2024 | 3:00 PM IST