KTIL top bidder for Lanco Hoskote Highway, NCLT approval awaited – The Economic Times

Clipped from: https://economictimes.indiatimes.com/industry/indl-goods/svs/construction/ktil-top-bidder-for-lanco-hoskote-highway-nclt-approval-awaited/articleshow/78358155.cmsSynopsis

A banker in the know of the developments said the committee of creditors (CoC) has recently approved the bid of Kalyan group entity and the resolution professional has submitted the CoC’s recommendations to the National Company Law Tribunal (NCLT).

Hyderabad: Kalyan group firm – Kalyan Toll Infrastructure (KTILNSE 2.41 %) – has emerged the top bidder for Lanco Hoskote Highway (LHHL), the Lanco group’s roadways entity that developed Bengaluru-Hoskote-Mulbagal section of National Highways, which is currently undergoing insolvency resolution process.

A banker in the know of the developments said the committee of creditors (CoC) has recently approved the bid of Kalyan group entity and the resolution professional has submitted the CoC’s recommendations to the National Company Law Tribunal (NCLT).

If approved by the NCLT, the LHHL toll road project will become the first National Highways asset to change hands through the corporate insolvency resolution process (CIRP) mechanism.

Indore-based construction firm KTIL, which takes up road projects under build, operate and transfer (BOT) mode, has reported a net profit of 109 crore on a revenue of 831 crore during the fiscal-ended March 2020. Its latest net worth stood at over 670 crore.

Kalyan group had in the last decade executed 12 BOT projects worth around 2,500 crore, of which eight projects are currently operational.

With the Lanco group’s road project arm defaulting to lenders, the Tribunal had, in October last year, ordered CIRP proceedings and appointed a resolution professional.

LHHL’s outstanding debt stood at 690.15 crore comprising 648.27 crore to financial creditors and 41.87 crore to operational creditors. Of this, the admitted debt of LHHL amounted to 443.4 crore to SBI and 204.87 crore to Edelweiss Asset Reconstruction Company.

As against this, the resolution professional appointed by the Tribunal Raghu Babu Gunturu had identified around 200 crore worth of assets at LHHL. When contacted,Gunturu told ET that “a detailed resolution plan as approved by the CoC has been submitted to the NCLT for its approval.”

“In its bid, the Kalyan group firm had offered to clear around Rs 186.81 crore debt of financial and operational creditors and Rs 5.19 crore to the operational creditors,” said the banker quoted above. “The payments to financial creditors include upfront payments and deferred payments till March 2022, which was approved by the CoC.”

Gunturu said toll road projects undergoing stress are primarily due to lower than anticipated toll collections and significant cost overruns during project implementation that were resulting in financial stress. “IBC resolution mechanism can facilitate lenders in recovering their money, where the project gets a better operator as the risk and reward is quantifiable, which in turn helps the NHAI who is interested in safety and continuity of the road projects.”

LHHL, promoted by Lanco Infratech, had completed the Bangalore-Hoskote-Mulbagal project in December 2013 to begin toll collections with a concession period of 20 years beginning January 2008.

NHAI had awarded the project with an estimated cost of Rs 736.38 crore in favour of LHHL in February 2007 but the cost escalated to Rs 1,109 crore owing to various factors by the time the project was completed to commence operations.

“The Kalyan group firm has also agreed to infuse Rs 35.67 crore consisting of share capital and unsecured loans within 15 days from receiving the approval of the Tribunal,” said a banker in the know of CIRP developments at LHHL, seeking anonymity.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s