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Palogix gets new promoter at National Company Law Tribunal

Creditors, led by ICICI Bank as well as others like Titagarh group, have unanimously approved JFC Finance as a buyer

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Global private equity firm Bessemer Venture Partners and multilateral funding agency IFC backed Palogix Infrastructure has emerged as one of the first success stories to come out of the insolvency process.

Amid concerns of banks which are up for some significant haircut in big-ticket insolvency cases, Palogix Infrastructure, a railways infrastructure service provider has seen its fate been successfully decided at the National Company Law Tribunal (NCLT) with the lenders being able to find a buyer without haircut of the principal amount of debt.

Creditors, led by ICICI Bank as well as others like Titagarh group, have unanimously approved JFC Finance as a buyer. JFC, a stressed asset buyer backed by industry veteran Sanjay Kumar Mishra, has promised to pay off the principal component with close to 25% haircut of the overall debt, including the accrued interest part, insolvency professional Mamta Binani, who handled the process, told DNA Money.

"There were about 16 expressions of interest from prospective bidders. The total debt level was about Rs 170 crore, including unpaid interest component, on which there would be haircut to the extent of about 25%," Binani said.

Promoted in 2007, Palogix soon emerged a strong player in the railways logistics, with a focus on bulk and containerised cargo and developed a network of railways-based private freight terminals at several locations offering facilities like warehousing, stockyards at places like a 23 acre terminal at Durgapur in West Bengal and logistic hubs in Odisha.

Apart from raising Rs 25 crore each from IFC and Bessemer Venture Partners, it was also sanctioned Rs 111 crore by ICICI Bank.

Difficult economic environment, however, put Palogix in financial difficulties, and by the end of 2016 it failed to pay up about Rs 32.22 crore to ICICI Bank, which approached the NCLT.

"It was unfortunate that the promoters couldn't bid as per prevailing regulations. That said, the settlement of the case before the NCLT would provide encouraging signals to the banking sector on the possibilities of the desired resolution of similar cases," she said.

Back On Track

Palogix, a railways infra service provider, has seen its fate been successfully decided at the NCLT with the lenders being able to find a buyer without haircut of the principal amount of debt

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