Hyderabad: In an interim order, the Telangana High Court on Friday ordered the State Bank of India (SBI) and other banks not to divest Simhapuri Energy Limited for less than the OTS proposal of Rs 800 crore.
Judge G. Radha Rani was dealing with a petition filed by Madhucon Infra, the majority shareholder of Simhapuri Energy Limited with an 80.78% stake.
He urged the court to prevent banks from undervaluing the company and its assets at anything less than the OTS proposal. She brought to the attention of the court that a consortium of lending bankers was trying to get rid of the company for a pittance
335 million rupees.
The company has set up a thermal power plant with a capacity of 600 MW using imported coal for power generation. He secured loans worth Rs 3,250.34 crore from a consortium of banks led by SBI. The company has repaid term loans to the tune of Rs 2,054 crore. The operation of the company was severely affected when the plant was kept shut down in order to reserve electrical capacity for AP discoms.
As an alternative measure, they submitted two OTS proposals; one for an amount of Rs 800 crore to secured lenders and the second of Rs 700 crore (plus Rs 1,811 crore) to be allocated as share capital. However, SBI, as the lead bank, did not consider the said proposal, following which the company was put into liquidation.
During the liquidation process, the value of the company was reduced from Rs 600 crore to Rs 335 crore. It was then that Madhucon Infra Limited approached the High Court, they said.