MEP Infrastructure Developers to seek settlement with lenders under IBC: Jayant Mhaiskar

Mumbai: MEP Infrastructure Developers (MIDL) will submit a plan under Section 12A of the Insolvency and Bankruptcy Code (IBC) and seek a settlement with lenders, its chairman told ET.

Jayant Mhaiskar said that before being admitted to bankruptcy, the company had planned to bring in a new investor. This plan will be pursued, he said. Section 12 A of IBC allows a promoter to settle dues with creditors and withdraw the insolvency application if 90% of the lenders agree to the plan. "We had already proposed a settlement. Now that the IBC process has started, we will wait for more clarity and (see) how the company is valued and submit a plan accordingly," Mhasikar said.

Debt-laden MIDL was admitted to insolvency in late March after Bank of India (BoI) filed a petition. BoI and IDBI Bank are the primary creditors to the company. ET could not ascertain how much the company owes to the lenders, since creditors claims are yet to be made public.

Total banking sector exposure to the MIDL group is estimated to be close to ₹1,500 crore, including some with local co-operative banks, but most of it is in subsidiary companies or special purpose vehicles like MEP Infrastructure (MIPL), which was earlier operating the Bandra-Worli sea link.

MIDL has about 38 subsidiaries and joint ventures for different projects. Some contracts have been scrapped due to delay in project execution. "It is unclear whether the court wants to consolidate all the group exposure into a single insolvency process or wants to do it separately for all SPVs as well. We will know as the case progresses," said a senior bank executive. Ravindra Kumar Goyal has already been appointed as resolution professional (IRP). He has already called for claims from creditors to determine the dues of the company. Two meetings of committee of creditors have taken place, the company informed the stock exchanges.

The admission of BoI's petition came just over a month after MIDL sought shareholder approval to bring a new investor and infuse ₹225 crore under the pre-packaged insolvency resolution process (PPIRP). The plan was that the company will issue shares to Nagpur-based Ashmi Road Carriers post shareholder approval. However, with the company's default topping ₹1 crore, PPIRP may not be feasible, according to regulations.