NCLT allows fresh bids for insolvent KSK Mahanadi Power

7 Jun 2024 , 12:15 PM

The committee of creditors (CoC) of KSK Mahanadi Power Company Ltd was granted permission by the National Company Law Tribunal (NCLT) on Thursday to request new bids for the company.

Megha Engineering & Infrastructure Ltd.’s appeal against the CoC’s decision to request further bids was denied by the tribunal since twelve potential bidders had expressed interest in the first round of bidding. The tribunal declared, “Application is frivolous and without merit and dismissed with costs.”

KSK Mahanadi’s resolution professional (RP) had contended that new bidding was necessary due to the shift in circumstances—KSK Mahanadi is now going through the corporate insolvency resolution process (CIRP) on its own.

The NCLT lifted a hold on KSK Mahanadi’s CIRP in April, supporting the CoC’s decision to approve the entity’s CIRP alone rather than merging it with the other two KSK Mahanadi businesses that are undergoing CIRP.

The lenders had previously advocated a collective CIRP in the hopes of receiving a higher price for the three firms. Raigarh Champa Rail and KSK Mahanadi Water were the other two organisations.

Megha Engineering’s attorney said that by not getting NCLT approval before calling a new round of bidding, RP had broken the regulations of the Insolvency and Bankruptcy Code, 2016 (IBC) and had neglected to give a justification for the new round.

The attorney further emphasised that all well-known power corporations, including Jindal Power, Adani Power, and Vedanta Ltd., have already filed their bids for the first round.

Unless there was a clear arbitrary or irrational decision made by the CoC, the tribunal was hesitant to interfere with its commercial judgement. The CIRP of KSK Mahanadi Power has attracted bidders such as Coal India Ltd and NTPC Ltd in the second round of bidding.

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