Insolvency Proceedings: NCLT To Decide On Jyoti Structures’ Fate On Monday 

The Mumbai bench of the National Company Law Tribunal (NCLT) will decide on Monday whether to admit the insolvency application filed by the State Bank Of India against defaulting power transmission company Jyoti Structures Ltd. earlier this week.

This is the first of the four insolvency cases referred to the NCLT after the Reserve Bank of India identified 12 large stressed accounts for immediate action under the Insolvency and Bankruptcy Code. Together, the dozen companies contribute a quarter of India's bad debt.

During the hearing on Thursday, Jyoti Structures told the NCLT that it is at an advanced stage of negotiating the sale of the company with a potential buyer and will provide a copy of the offer to the court in a sealed cover. Amit Vyas appearing for Jyoti Structures told the tribunal that their objective was to sell the company as a going concern.

The bench permitted the company to pass on the proposal to the interim insolvency resolution professional who would be appointed if the case was admitted and recorded submissions of both parties.

The company did not raise any objections on the debt and insolvency proceedings initiated by lenders.

Final orders will be passed on Monday , July 3.

SBI, which is the lead banker to the company, on Wednesday filed the bankruptcy proceedings case against Jyoti Structures with the tribunal following the RBI directive. Creditors have also moved the NCLT against steelmakers Monnet Ispat Ltd and Electrosteel Steels Ltd., and Essar Steel Ltd.

Owing to the pressures emanating from the power sector, Jyoti Structures has struggled to clear its debt to domestic lenders. Moreover, a failed international business has also put a severe financial strain on the parent company. Last year, the lenders to the company had invoked SDR in a bid to sell a majority stake in the company to a bidder. This led to some initial interest from a few power transmission companies, but there was no sale.