BHEL challenges REC's plea for HEL insolvency

economictimes.indiatimes.com:

Bharat Heavy Electricals has challenged an insolvency petition filed against West Bengal-based coal power producer Hiranmaye Energy, as it will «stall» BHEL's efforts to enforce a ₹388.4 crore arbitration award against the company. BHEL has filed an application before the Kolkata bench of the National Company Law Tribunal (NCLT), seeking cancellation of the insolvency petition filed by REC.

«Admission of REC's application against HEL would bring moratorium and the execution petition of BHEL would get stalled,' a person aware of the developments told ET. „The only remedy in such a situation would be to file its claim before the resolution professional, which is unlikely to be converted to cash.“ REC's petition under Section 7 of the Insolvency and Bankruptcy Code pertains to default on repayment of ₹2,500 crore debt.

BHEL's case against HEL is related to encashment of bank guarantees tendered by BHEL for an award of commissioning boiler turbine generator for 450 MW (3x150 MW) coal-based power plant at Haldia in West Bengal. BHEL won the award in October 2010 but the construction could begin only in March 2014 owing to delays in financial closure.