NCLT begins insolvency proceedings against Andhra Cement

Hyderabad: The National Company Law Tribunal (NCLT) has directed to initiate insolvency proceedings against Andhra Cement, a company owned by the debt-ridden Jaypee Group.

The Hyderabad Bench of the NCLT has also appointed Nirav K Pujara as the Interim Resolution Professional (IRP) of the company, and declared a moratorium in respect of the company as per the provision of the Insolvency & Bankruptcy Code (IBC).

"The company is now under CIRP (Corporate Insolvency Resolution Process) as per the provisions of the code. As per Section 17 of the code, the powers of the board of directors of the company stand suspended and as such the powers shall be vested with and exercised by the IRP," Andhra Cement said.

The company has also shared the order passed by the insolvency tribunal on April 26, 2022, in this regard. Meanwhile, in a separate filing, Andhra Cement has invited its creditors to submit their claims by May 10, 2022, before the IRP.

NCLT's direction came after a petition filed by Pridhvi Asset Reconstruction and Securitisation Company Ltd, claiming a default. Andhra Cement had taken loans from several banks, including IDFC First Bank, HDFC and Karur Vysya Bank, and amounts were disbursed during the period from 2012 to 2016. Subsequently, Edelweiss Asset Reconstruction Company Limited acquired the loans and underlying security interest, including all rights, title and interest therein, held by the original lenders.

Later, the petitioner acquired loans to an extent of Rs804.72 crore and underlying security interest, including all rights, title and interest held by Edelweiss Asset Reconstruction and Karur Vysya Bank. Andhra Cement failed to abide by its repayment obligations, following which Pridhvi Asset Reconstruction and Securitisation Company moved the NCLT.