Punj Lloyd liquidation period extended by six months to 30 June’24

EPC company Punj Lloyd on 26th January 2024 said that that the National Company Law Tribunal (NCLT) has granted a further extension of time until June 30, 2024, for the completion of its liquidation process.

The counsel of the liquidator — Ashwini Mehra – had argued in the tribunal that considering the fact that liquidation as a going concern could not be completed, if the time period is extended for a period of 6 months.

The counsel further argued that unless the time period for liquidation of the Corporate Debtor is extended, the same will expire on 31 December 2023, and may lead to the severe consequences and avoidable loss, harm and damage to the Corporate Debtor and all its stakeholders, including but not limited to its creditors and around 1000 employees. Punj Lloyd is currently running as many as 16 Engineering Procurement and Construction (EPC) and defence projects across various locations in India as well as abroad.

The counsel informed the tribunal that the Stakeholders’ Consultation Committee (SCC) of Punj Lloyd has also approved the extension of the liquidation period by six months, and authorized the liquidator to move the present application under Section 44(2) of the Liquidation Regulations in its 11th meeting, which held on 14 December 2023.

Punj Lloyd was pushed to insolvency after ICICI Bank dragged it to NCLT in March 2018 for failing to pay Rs 854 crore. The NCLT admitted ICICI Bank’s insolvency petition against the company, and thus began the long process of resolution, which is yet to get over. The company owed Rs 13,386 crore to over 1097 creditors including both financial and operational creditors.

A final resolution plan was submitted by a consortium of Payard Investments Private Ltd and Prudent ARC Ltd. However, the Committee of Creditors rejected the resolution by a vote share of 79.53%.

The Committee of Creditors in March 2021 decided to sell Punj Lloyd as going concern under the liquidation process. The resolution professional Ashwini Mehra prayed the Delhi bench of NCLT to pass an order to liquidate the company as going concern because Punj Lloyd had over 3,000 employees and several ongoing EPC projects.

The NCLT allowed the request of the resolution professional and ordered liquidation of the company as a going concern in July 2022. Ashwini Mehra was appointed the liquidator. Ever since the liquidator of the company has been trying to sell it as going concern.  Under the liquidation process, the stakeholders submitted claims of Rs 17,212 crore.

After several extensions for the last date for submitting EoI, both Adani Infra and Vedanta Ltd submitted their bids in October 2022. The two bidders had to revise their bids in December 2022 after the Stakeholders Consultation Committee (SCC) found both the bidders treating the going concern sale process.

Also See: 2nd round of e-auction for sale of Punj Lloyd as going concern on 28 Aug