[ Tongam Rina ]
ITANAGAR, Feb 24: Athena Demwe Power Limited wants the government of Arunachal to bail it out after the Indian Bank, a public sector bank took them to the National Company Law Tribunal (NCLT) after the company failed to clear the debts amounting to Rs 333.80 crore.
The National Company Law Tribunal had ordered the commencement of Corporate Insolvency Resolution Process against Athena Demwe Power Limited, the project proponent of 1750 MW Demwe Lower Project on 28 September, 2017 as it called on the creditors to submit their claims.
The company had challenged the order of the NCLT of 28 September before the National Company Law Appellate Tribunal which came up for hearing on 6 February.
The Tribunal said that resolution process will continue in the meantime as it posted the next hearing for 5 March.
The lawyers appearing on behalf of the company have said that it has approached the bank for settlement, adding that the Arunachal Pradesh, with 26 per cent of the equity shareholding in the company, has been approached to ensure the payment agreed amount to the bank.
However, the lawyers appearing for the Indian Bank and others said that the he was yet to receive any information in this regard.
Arunachal’s Power department said that Athena wants the government to take over the project by increasing equity but since the state has no resources to spare, a decision was yet to be taken.
An official of the department further said that the state was very unlikely to take over the project because of roadblocks, including valuation and authentication.
On 28 September last year, the NCLT was told that Corporate Debtor (Athena Demwe Power Ltd), which is stated to be “Special Purpose Vehicle” of a conglomeration of companies, approached the bank for financial assistance in the form of term loan and other financial assistance for setting up a major power generating project in the North East. Given the size of the project, the corporate debtor had sought funding from several banks which approved and sanctioned various limits. The disbursement by banks, other than the financial creditor and another, was however, to be made upon implementation of the project and subject to other terms and conditions. The project is yet to be set up as it is awaiting several clearances from different departments of the government”.
A short term loan of Rs 200 crores in 2011 and another Rs 100 crores was granted to be repaid in six months. Since the corporate debtor failed to regularise the account, it was declared a non-performing asset on 31 May, 2013.
The court was further told that the corporate guarantees of M/s AIP Private Limited, Athena Energy Ventures Pvt Ltd and Athena Infraprojects Ltd were accepted by way of pledge of their shares as collateral security and all terms and conditions of disbursement were duly accepted by the company.
The court was also told new promoters and investors have been brought in with the consent of the government of Arunachal Pradesh and initiation of any resolution process shall adversely hit the interests of stakeholders, including that of the financial creditor whose repayment of debt is undertaken to be liquidated or at least reduced.
However, the government of Arunachal said that it was not aware of the outcome of the process.
According to the website of the project developer, the run-of-the-river Demwe Hydro Electric Power Project is being developed in two stages with a generation capacity of 1,750 MW (Demwe Lower) and 1,080 MW (Demwe Upper) respectively.
Since the memorandum of agreement was signed in 2007, the power project has run into one controversy after another, the latest being the insolvency process for non-payment of dues to the Indian Bank.
The standing committee of the National Board for Wildlife (NBWL) is currently visiting the 1750 MW Demwe Lower Hydroelectric Project in Lohit district to re-examine the ecological impacts of the hydro power project following a decision by the Environment Ministry after a decision by the National Green Tribunal (NGT ).
The NGT had suspended the Stage-I and Stage-II forest clearances to the project in October last year, stating that former Environment Minister Jayanthi Natarajan’s decision to overrule the non-official expert members of NBWL to clear the Demwe Lower Project was taken in violation of laid down rules.
The former minister in 2012 had overruled the concerns of expert members regarding downstream impacts to the Dibru Saikhowa National Park and Biosphere Reserve, as well as the Kamlang Sanctuary, following which conservationist Bimal Gogoi had challenged the forest clearance before the Tribunal.
The Tribunal had also directed the Standing Committee of NBWL to reconsider the issue and pass appropriate orders within six months. It also said that until then, stages I and II forest clearances issued in March 2012 and May 2013 respectively, and the consequential order of the state government allowing diversion of 1415.92 ha forest land for the hydel project, will stand suspended.
The environment clearance for the project was granted in 2010.
[ Tongam Rina ]