MBL Infrastructure gets closer to resolution plan

MBL Infrastructure could emerge as India’s first road-builder to achieve a successful insolvency resolution on about Rs 1,700 crore of outstanding loans, with the promoter agreeing to infuse more capital into the business, two people familiar with the process told ET.
MBL promoter Anjanee Kumar Lakhotia will now bring in about Rs 120 crore, nearly five times more than the capital he had promised initially, one of the people cited above said. The repayment period on the loans is also proposed to be reduced to about 9.5 years from 12.

“Creditors seemed receptive about the revised resolution plan, and they have gone back to their respective boards for management approvals,” said the second person cited above.

A consortium of about 15 lenders, including SBI, PNB, and RBL Bank, have now decided to hold no further discussions on the revival scheme, and they would take the final decision well before December 23, the deadline set for the company under insolvency and bankruptcy proceedings that started eight months ago. SBI is the lead lender.

Emails sent to MBL, SBI, and PNB remained unanswered until the publication of this report.

The final resolution proposal would be put up for voting among creditors in the second or third week of December.

Lenders collectively claimed about Rs 1,700 crore in loan defaults. The repayments, if approved, will happen through different mechanisms.

Even the promoter has promised to release money as soon as different litigations with the government come to an end. For instance, MBL entered into a road project with the Madhya Pradesh Road Development Corporation some years ago. But the company could not receive payments as the matter went to court.

Moreover, the promoter would be issuing worth about Rs 400-500 crore corporate bonds, which Lakhotia had proposed for secondary-market trading. Banks opposed the move citing possibilities of mark-to-market losses. Finally, Lakhotia has accepted the lenders’ viewpoint.

Lenders were not convinced with the promoter’s earlier resolution plan. The new proposal would also include monetisation through some of the company's subsidiaries over the next few years.

NCLT Kolkata admitted the company for insolvency proceedings in March and appointed Delhi-based Sanjeev Ahuja as the resolution professional in the case. RBL Bank had dragged the once sought-after road builder to the NCLT for failing to repay a loan.

Bankruptcy proceedings are mandated to be completed within a maximum nine months, failing which a company will be liquidated, resulting in potential job losses.