Anil Ambani-owned Vidarbha Industries moves Bombay High Court against lenders' move to auction company's debt
Vidarbha Industries Power has petitioned the Bombay High Court objecting to a decision by its lenders to auction the company's debt, court documents show. Banks led by Axis Bank have scheduled a Swiss Challenge auction to sell principal debt of ₹2,569 crore and $27.7 million in overseas currency loans of the distressed power company on August 8. Last month, lenders rejected a ₹1,260-crore one-time settlement the promoter offered and chose CFM Asset Reconstruction Company's ₹1,220 crore offer as an anchor bid for the Swiss auction.
On August 2, a division bench of Justice GS Patel and Justice Neela Gokhale adjourned the matter to August 30 for further hearing. Vidarbha Industries Power and its affiliate Rosa Power Supply approached the court on June 20 through law firm Mulla & Mulla & Craigie Blunt & Caroe. The power producer has filed a petition against Axis Bank and the Reserve Bank of India, represented by Khaitan & Co.
Senior counsels Harish Salve and Prateek Seksaria appeared for Vidarbha Industries while senior counsels Janak Dwarkadas and Venkatesh Dhond appeared for Axis Bank and RBI. Senior officials from Anil Ambani group declined to comment on the matter. Lenders have shortlisted Aditya Birla ARC, Avenue Capital-backed Asset Reconstruction Company of India (Arcil), and Reliance ARC as eligible candidates to submit counter offers at the Swiss auction.
The High Court has not granted a stay, and the next hearing is scheduled August 30. So, it is likely that lenders will go ahead with the auction, said a legal expert. As an anchor bidder, CFM ARC will have the first right to match the highest offer that lenders receive on August 8.
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