East Coast Energy to face heat as SBI approaches NCLT

Mumbai Jan 10: Another company may soon face the heat of insolvency proceedings as State bank of India has approached the NCLT against independent power producer East Coast Energy Pvt Ltd (ECEPL) under the Insolvency and bankruptcy code.The Andhra Pradesh-based power producer had defaulted loans of over Rs 5,000 crore to many lenders including Power Finance Corporation (PFC).

Officials have said that "East Coast Energy had defaulted over Rs 950 crore of loans to SBI and the lender has filed an application before the Tribunal seeking insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code 2016."

They added that "For nearly the past two years, there is no activity at the project site with funds crunch following differences among the lenders on meeting the cost overruns. Subsequently, most of the top executives, including its managing director Tatineni Venkata Krishna, had left the company."

The company had faced hurdles as the project was delayed because of the protests of the local people in Srikakulam district.