Menu
Search
Submit Article
Friday, July 4, 2025
17 C
New York

GVK Power and Infrastructure Ltd, an Indian conglomerate, has been facing financial difficulties, and its lenders have decided to restart the Insolvency and Bankruptcy Code (IBC) process. Here’s what this means:

What is IBC? The Insolvency and Bankruptcy Code (IBC) is a law that provides a framework for resolving insolvency and bankruptcy cases in India. It aims to ensure that businesses facing financial difficulties are either revived or liquidated in a timely and efficient manner.

Why are lenders restarting the IBC process for GVK Power? GVK Power has been struggling to meet its debt obligations, and its lenders have been trying to find a resolution. The company has a significant debt burden, and its financial performance has been under pressure due to various factors, including regulatory issues and sectoral challenges.

The lenders, which include banks and financial institutions, had initially admitted GVK Power to the IBC process in 2020. However, the process was put on hold due to various reasons, including a potential restructuring plan.

Now, the lenders have decided to restart the IBC process, indicating that they are not confident about the company’s ability to repay its debts or meet its financial obligations. The restart of the IBC process means that GVK Power will have to undergo a fresh insolvency resolution process, which could lead to either a restructuring of its debt or liquidation of its assets.

What are the implications? The restart of the IBC process for GVK Power has significant implications for the company, its stakeholders, and the Indian power sector as a whole. Some of the possible outcomes include:

  1. Restructuring of debt: The IBC process may lead to a restructuring of GVK Power’s debt, which could involve a reduction in debt, extension of repayment timelines, or conversion of debt into equity.
  2. Change in ownership: The IBC process could lead to a change in ownership of GVK Power, with new investors or a consortium of lenders taking over the company.
  3. Liquidation of assets: If the IBC process fails to yield a viable resolution plan, GVK Power’s assets may be liquidated to pay off its debts.
  4. Impact on the power sector: The IBC process for GVK Power could have a ripple effect on the Indian power sector, which is already facing challenges such as regulatory uncertainty, financial stress, and environmental concerns.

Overall, the restart of the IBC process for GVK Power is a significant development that highlights the challenges faced by Indian companies in the power sector and the need for effective resolution mechanisms to address financial distress.

Business
Updated:
NewsPepr
By NewsPepr
spot_imgspot_imgspot_img
<p>GVK Power and Infrastructure Ltd, an Indian conglomerate, has been facing financial difficulties, and its lenders have decided to restart the Insolvency and Bankruptcy Code (IBC) process. Here's what this means:</p> <p><strong>What is IBC?</strong> The Insolvency and Bankruptcy Code (IBC) is a law that provides a framework for resolving insolvency and bankruptcy cases in India. It aims to ensure that businesses facing financial difficulties are either revived or liquidated in a timely and efficient manner.</p> <p><strong>Why are lenders restarting the IBC process for GVK Power?</strong> GVK Power has been struggling to meet its debt obligations, and its lenders have been trying to find a resolution. The company has a significant debt burden, and its financial performance has been under pressure due to various factors, including regulatory issues and sectoral challenges.</p> <p>The lenders, which include banks and financial institutions, had initially admitted GVK Power to the IBC process in 2020. However, the process was put on hold due to various reasons, including a potential restructuring plan.</p> <p>Now, the lenders have decided to restart the IBC process, indicating that they are not confident about the company's ability to repay its debts or meet its financial obligations. The restart of the IBC process means that GVK Power will have to undergo a fresh insolvency resolution process, which could lead to either a restructuring of its debt or liquidation of its assets.</p> <p><strong>What are the implications?</strong> The restart of the IBC process for GVK Power has significant implications for the company, its stakeholders, and the Indian power sector as a whole. Some of the possible outcomes include:</p> <ol> <li><strong>Restructuring of debt</strong>: The IBC process may lead to a restructuring of GVK Power's debt, which could involve a reduction in debt, extension of repayment timelines, or conversion of debt into equity.</li> <li><strong>Change in ownership</strong>: The IBC process could lead to a change in ownership of GVK Power, with new investors or a consortium of lenders taking over the company.</li> <li><strong>Liquidation of assets</strong>: If the IBC process fails to yield a viable resolution plan, GVK Power's assets may be liquidated to pay off its debts.</li> <li><strong>Impact on the power sector</strong>: The IBC process for GVK Power could have a ripple effect on the Indian power sector, which is already facing challenges such as regulatory uncertainty, financial stress, and environmental concerns.</li> </ol> <p>Overall, the restart of the IBC process for GVK Power is a significant development that highlights the challenges faced by Indian companies in the power sector and the need for effective resolution mechanisms to address financial distress.</p>
- Advertisement -


GVK Power and Infrastructure’s Insolvency Process to be Re-Run with Separate Bids for Individual Assets

Lenders to GVK Power and Infrastructure (GPIL) are set to re-run the debt-laden company’s insolvency process, seeking separate bids for each of its four individual assets, including land parcels, power, roads, and a residual stake in the Mumbai airport, in a bid to maximize value. The move comes after an earlier attempt to find a buyer for the company was abandoned due to non-compliant resolution plans. With approximately ₹16,000 crore of bank funds stuck in this account, lenders believe that selling the company on an asset basis will lead to better value.

The decision to re-run the insolvency process and seek separate bids for individual assets is a significant development in the ongoing saga of GVK Power and Infrastructure’s debt woes. The company, which has subsidiaries including GVK Perambalur SEZ, GVK Energy, GVK Transportation, and a minority stake in the Mumbai airport business, owes ₹15,944 crore to verified creditors led by ICICI Bank. The resolution professional, Satish Gupta, is now seeking separate plans for four assets – land, the power unit, roads, and the airport stake. Potential buyers can also give an offer for all four assets. The move is expected to attract more bidders, as not all parties may be interested in acquiring the company as a whole.

Background and Context

The insolvency process for GVK Power and Infrastructure was initiated after the company failed to pay its debts. The lenders, led by ICICI Bank, had attempted to find a buyer for the company earlier, but the two resolution plans received were non-compliant with the provisions of the request for proposals and the bankruptcy code. The decision to re-run the process and seek separate bids for individual assets is a result of this earlier failed attempt. The lenders are hoping that this new approach will yield better results and help to maximize the value of the company’s assets.

Key Assets on Offer

The four individual assets that are being offered for sale include:
* Land parcels, including an industrial freehold land parcel of more than 2,600 acres at Perambalur district, Tamil Nadu, abutting the Chennai-Trichy highway
* Power assets, including a 100% stake in GVK Energy, which holds 60% in the Alaknanda Hydro Power Company, a 330 MW hydro power plant in Uttarakhand
* Roads, including stakes in the Deoli-Kota Expressway, GVK Bagodara Vasad Expressway, and GVK Jaipur Expressway Pvt Ltd
* A residual 1.7% stake in GVK Airport Developers Ltd, which previously owned the Mumbai airport, now a part of the Adani Group

These assets are expected to attract interest from a range of bidders, including infrastructure companies, power producers, and investors. The sale of these assets is expected to help to repay some of the debts owed by GVK Power and Infrastructure.

Bid Process and Timeline

Bidders can submit expressions of interest by July 8, with a ₹10 crore earnest money deposit (EMD) in case they want to bid for the whole company. The EMD for only the Perambalur SEZ is set at ₹5 crore, for the airport stake at ₹3 crore, and energy and residual stakes at ₹1 crore, respectively. The lenders are expected to call for resolution plans later this month, depending on the demand seen for various assets.

The bid process and timeline are crucial in determining the success of the insolvency process. The lenders are hoping that the new approach will yield better results and help to maximize the value of the company’s assets.

Quotes and Data

According to a finance industry executive aware of the details, “This is the second attempt to find a buyer. Lenders believe that selling the company on an asset basis will lead to better value since this company has different businesses and not all bidders will be keen to bid for the company as a whole.” The data on the company’s debts and assets highlights the complexity of the insolvency process. With approximately ₹16,000 crore of bank funds stuck in this account, the lenders are under pressure to find a resolution that maximizes value.

Some key highlights of the situation include:
* ₹15,944 crore owed to verified creditors led by ICICI Bank
* ₹16,000 crore of bank funds stuck in this account
* 44% stake held by ICICI Bank, followed by 28% held by Bank of India, and 12% held by Canara Bank
* Four individual assets being offered for sale, including land parcels, power assets, roads, and a residual stake in the Mumbai airport

Conclusion and Implications

The decision to re-run the insolvency process and seek separate bids for individual assets is a significant development in the ongoing saga of GVK Power and Infrastructure’s debt woes. The move is expected to attract more bidders and help to maximize the value of the company’s assets. The implications of this development are far-reaching, with potential consequences for the company’s creditors, employees, and stakeholders. As the bid process and timeline unfold, it remains to be seen whether this new approach will yield better results and help to resolve the company’s debt woes.

Keywords: GVK Power and Infrastructure, insolvency process, debt resolution, asset sale, lenders, ICICI Bank, Bank of India, Canara Bank, Mumbai airport, hydro power plant, roads, infrastructure, bankruptcy code.

Hashtags: #GVKPowerAndInfrastructure #InsolvencyProcess #DebtResolution #AssetSale #Lenders #ICICIBank #BankOfIndia #CanaraBank #MumbaiAirport #HydroPowerPlant #Roads #Infrastructure #BankruptcyCode #DebtWoes #FinancialNews #BusinessNews #EconomicNews #IndiaNews.



Source link

- Advertisement -
spot_imgspot_imgspot_img
NewsPepr
NewsPeprhttp://newspepr.com
At NewsPepr.com, we deliver quick, concise, and easy-to-understand news updates from around the world. No more long articles—just the essential details, simplified using AI-powered technology. 🌍 Stay Informed Without the Overload!

Latest news

- Advertisement -
spot_imgspot_imgspot_img
- Advertisement -
- Advertisement -
- Advertisement -

Related news

- Advertisement -

About us

Your one-stop destination for simplified and crisp news updates from around the world. Our mission is to make news consumption easy, fast, and accessible for everyone.

Company

The latest

Speed Up Your iPhone and Clear Your Cache Before iOS 26 Drops

Mobile 0
Act as a senior journalist and professional...

realme’s cryptic teaser ignites fan frenzy ahead of 15 Pro; ‘Live for Real’ poster triggers celebrity speculation

Mobile 0
Act as a senior journalist and professional...

One UI 8 will take Samsung’s Audio Eraser to the next level

Mobile 0
Act as a senior journalist and professional...

Subscribe

Disclaimer: NewsPepr.com simplifies and aggregates news from trusted sources and other news websites, with proper attribution to all referenced content under fair-use policy; however, we are not responsible for the accuracy or reliability of the original content.

NewsPepr.com © 2025. All Rights Reserved.