India Growth Opportunities Fund (IGOF), a scheme of Srei Multiple Asset Investment Trust (SMAIT), has written to the resolution professional of Odisha Slurry Pipeline Infrastructure Ltd (OSPIL), requesting that the company be taken out of the corporate insolvency resolution process.
OSPIL is under the corporate insolvency resolution process for non-payment of loans to banks and other financial institutions. IGOF owns around 69 per cent equity stake in OSPIL; the rest is held by Essar Steel..
“We re-emphasise that resolving the OSPIL debt under (the) corporate insolvency resolution process would lead to lower recovery and prejudiced to the lenders’ interest,” SMAIT said in a six-page letter, reviewed by BusinessLine .
SMAIT has further maintained that around Rs. 26,00 crore of investment (debt and equity) has gone into OSPIL on the premise that it was to receive charges from Essar Steel India Ltd (ESIL) for use of the slurry pipeline at the latter’s Odisha facility. The usage charge would have generated enough revenues to pay off the debt.
“The lenders of ESIL and OSPIL are the same and they should have known that ESIL stopping payment should have (a) negative impact on OSPIL,” the letter said, indicating that such stoppage of usage charges would adversely impact debt servicing.
SMAIT has now requested the resolution professional of OSPIL to raise the due demand for “continued usage” of the slurry pipeline by ESIL, which is to the tune of Rs. 520 crore.
“Bbased on future rentals payable, the entire dues to lenders can be conveniently serviced as originally envisaged,” the letter further said.