Insolvency resolution bids invited for Gayatri Projects after promoters failed to get relief

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The lenders have invited expressions of interest (EoI) from the prospective resolution applicants for the resolution of Hyderabad-headquartered Gayatri Projects Ltd (GPL).

The move comes after the National Company Law Appellate Tribunal’s (NCLAT) bench at Chennai early this month turned down an appeal by the promoters of the bankrupt infrastructure firm challenging the corporate insolvency resolution process (CIRP) as ordered by the National Company Law Tribunal (NCLT) bench at Hyderabad.

The EoIs are invited from January 14 to January 29 for the infrastructure firm promoted by the family members of former Congress Parliament Member Tikkavarapu Subbarami Reddy with interests in roads, railways, land development, power, irrigation and mining projects, among others.

The bankrupt firm has an annual turnover of Rs 3,463 crore, networth of Rs 1,329.63 crore and total assets of Rs 5,864 crore on a standalone basis in the financial year 2019.

Gayatri Projects was admitted for CIRP proceedings in November 2022 by the NCLT’s Hyderabad bench after State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 claiming that the infrastructure firm defaulted on Rs 242.33 crore loans.

The promoters had moved the NCLAT bench at Chennai contending that they weren’t provided with a fair and reasonable opportunity of hearing before initiating the corporate insolvency resolution process and that the Tribunal had issued ex-parte orders. The suspended directors of Gayatri Projects also contended that the company was a going concern with arbitral awards in its favour amounting to over Rs 850 crore that was at the execution stage and they weren’t taken into consideration by the Tribunal at the time of passing the impugned order.

The lender SBI had submitted that it had complied with all the provisions under the IBC and IBC (Application to Adjudicating Authority) Rules 2016 and notices were sent to the corporate debtor Gayatri Projects, which did not appear before the Adjudicating Authority.

The Appellate Tribunal viewed that enough opportunity was provided to the corporate debtor, who admitted the debt and default, to represent the case after summons were served on it by the lender as directed by the Adjudicating Authority.

Accordingly, the Appellate Tribunal has turned down the plea of the suspended directors of the corporate debtor to set aside the order of the NCLT’s Hyderabad bench that ordered CIRP proceedings at the bankrupt infrastructure firm.