Tanzania-based METL was declared the preferred bidder by lenders led by Union Bank of India (UBI) in March 2020. Its offer of ₹245 crore for the ₹604 crore debt of the company meant a recovery of 40% for lenders. However, various litigations by the promoters, state government and tax departments have delayed the case beyond the IBC timeline.
“This case was admitted almost 5 years ago in October 2018, but lenders have faced several litigations right from promoters, GST department as well as state government departments in Karnataka. This case has gone to courts right from high courts to the Supreme Court due to different pleas filed at different times and is a symbol of how a resolution has been compromised by judicial delays,” said a person involved in the process.
The only saving grace for lenders is that the winning bidder is still committed to the plan and has also submitted a ₹30-crore bank guarantee. Besides UBI, the other lenders to the company are Bank of Baroda with 36% of the debt and Punjab National Bank with 24%. Bankers said delays like these are also impacting foreign investor appetite in the country.
In September 2022, the NCLAT irected the Bengaluru bench of NCLT to decide on the plan of METL in four weeks. But erstwhile promoters filed fresh applications either opposing METL plan or putting up new claims.
“There is a pattern in all these cases but the NCLT, instead of dismissing them, keeps on hearing them causing delays. The matter has not been heard for close to 4 months now and the next date of hearing is on October 5,” said a second person aware of the case.
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