21 June 2019: Lenders have referred DSC’s Lucknow-Sitapur project to the National Company Law Tribunal (NCLT) for insolvency resolution, even as banks are grappling with their debt problems with two other projects of what was once a high-profile group.
Banking sources said lenders have dues of around Rs 200 crore from the SPV executing the Lucknow-Sitapur project and NCLT is expected to hear the case next month. “Due to insufficient toll collection, very high rate of interest and construction of four new alternate non-tolling roads, entire lenders’ dues could not be met. However, out of five banks, the company has already settled with three banks and discussions with remaining two banks are underway. The company is making full efforts to meet the shortfall,” a DSC spokesperson said.
The Lucknow-Sitapur project is a BOT project, where tolling commenced in October, 2011. Since then, after meeting the monthly operation and maintenance expenses, the entire toll collection is going to lenders, the spokesperson said.
Lenders, however, said that there were problems with the KMP Expressway as well where the exposure is of the order of Rs 1,200 crore and DSC had offered to settle the dues for Rs 890 crore, which is unacceptable to most lenders, other than IDBI Bank.
Similarly, in case of Gwalior-Jhansi project, where lenders have an exposure of over Rs 550 crore, the project has been terminated and banks are asking the concessionaire to agree to the payment terms under a circular issued by National Highways Authority of India.