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Gurgaon Metro case: IL&FS gets 1,925 crore from Haryana govt

Further, appropriation of any amount from the escrow accounts will be subject to further orders of the NCLAT or any other competent legal authority as per the order, which would be duly complied with by IL&FS.

By: ENS Economic Bureau | Mumbai |
June 28, 2021 4:20:07 am
Gurgaon metro project“This ruling will also set a precedence for other projects wherein infrastructure companies, including IL&FS, are seeking payment of their legitimate dues and enforceability of valid contracts and concession agreements with various State Governments,” said a company spokesperson. (Representational Image)

IL&FS on Sunday received Rs 1,925 crore from state-owned Haryana Shehari Vikas Pradhikaran (HSVP) as interim termination payment in the Gurgaon Metro Project case.

This resolution of Rs 1,925 crore forms part of the Rs 61,000 crore total recovery estimated by the new board, led by Uday Kotak, which represents resolution of over 61 per cent of overall debt of around Rs 99,000 crore (fund based and non-fund based) as of October 2018, IL&FS said.

According to IL&FS, this payment, duly received in escrow accounts, comes in compliance of the Supreme Court’s order of March 26, 2021 that ruled in favour of IL&FS in the Gurgaon Metro Project — developed through ILFS subsidiaries and special purpose vehicles Rapid Metro Rail Gurgaon Limited (RMGL) and Rapid Metro Rail Gurgaon South Limited (RMGSL).

Further, appropriation of any amount from the escrow accounts will be subject to further orders of the NCLAT or any other competent legal authority as per the order, which would be duly complied with by IL&FS. The Supreme Court had directed HSVP to deposit 80 per cent of total “debt due” (over Rs 2,400 crore basis audit conducted by CAG), amounting to Rs 1,925 crore, within 3 months into the escrow accounts of the two SPVs.

Andhra Bank is the lead bank in the RMGL along with PNB, Indian Overseas Bank, Indian Bank, Punjab & Sindh Bank, UCO Bank, Bank of India and Dena Bank (presently Bank of Baroda). Canara Bank is the lead bank in RMGSL along with Andhra Bank, Corporation Bank (presently Union Bank of India), Punjab & Sindh Bank, Central Bank of India and IIFC (UK) Ltd.

“This ruling will also set a precedence for other projects wherein infrastructure companies, including IL&FS, are seeking payment of their legitimate dues and enforceability of valid contracts and concession agreements with various State Governments,” said a company spokesperson.

Either party, IL&FS SPVs and HSVP, have the liberty to refer any disputes relating to other rights under the concession agreement, as well as those arising from the audit report commissioned by CAG for determining the debt due, to Arbitration, as per the Supreme Court ruling.

IL&FS had bagged the two-phased Gurgaon Metro Project developed through RMGL and RMGSL in 2009 and 2013. Due to multiple unmet obligations by the HSVP, RMGL and RMGSL had terminated the concession agreements in September 2019 and demanded termination payments as per the concession agreement under authority event of default. HSVP had, however, refuted the contention of RMGL and RMGSL citing concessionaire event of default and challenged the matter in High Court of Punjab and Haryana, IL&FS said.

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