Thriveni Earthmovers bid rejected, Lanco Infratech may be headed for liquidation

NEW DELHI: Lanco Infratech could end up going into liquidation with bankers rejecting the highest offer made by Thriveni Earthmovers.
The resolution plan got just 16% support from the committee of creditors, people close to the development told ET. Under the Insolvency and Bankruptcy Code (IBC), a resolution plan needs a 75% vote to be accepted.

Lanco Infratech, one of the first 12 stressed assets referred for insolvency resolution by the Reserve Bank of India in June last year, owes about Rs 50,000 crore. Thriveni Earthmovers had offered Rs 1,400 crore in cash and liability for Rs 38,000 crore of debt at the subsidiary level, said the people cited above. Thriveni Earthmovers, with an annual turnover of $200 million, says it’s India’s largest iron ore mine developer and operator with capacity of 40 mtpaand 1billion tonnes mineral reserves.

The 270-day insolvency resolution process deadline ends on May 4, after which the asset has to be liquidated. To be sure, Thriveni Earthmovers could make an updated offer in the remaining days. At a meeting last week, the committee of creditors led by ICICI Bank rejected all the other bids, which had made offers that were close to the liquidation value of the company, said the people cited above. The lenders were unwilling to accept offers that were close to the liquidation value since that could lead to investigations and scrutiny later on, said the people cited above.

ICICI Bank, with an exposure of Rs 7,380 core, is the leading lender to Lanco, followed by IDBI Bank with a claim of Rs 3,608 crore. Lanco Infratech was referred to National Company Law Tribunal (NCLT) in August 2017.

Other bidders for Lanco included US asset management company Ingen Capital, US energy firm Penn Energy, DivyaSree Developers from Bengaluru, Solarland China, Cube Highways backed by I-Squared, and Kalyani Developers, Bengaluru, said the people cited above.