Cauvery Power to face insolvency proceedings
The account was classified as a non-performing asset by PNB in January 2019. The company has a coal-based captive power plant of 63 MW capacity at Gummudipoondi near Chennai.
The plant, which started generating power from November 2012, uses coal imported from Indonesia. The account was classified as a non-performing asset by PNB in January 2019. The bank then initiated the insolvency resolution process under the Insolvency and Bankruptcy Code.
PNB’s counsel has submitted that Cauvery Power was running the business operation “to the satisfactory level” till September 2016, the tribunal noted in its order on October 18. Thereafter it failed to service the interest regularly, owing to reasons like an increase in coal price, imposition of an additional cess by the central government, decline in power price and “consequently, the profit of the corporate debtor drastically declined for the financial year 2017”, the order quoted PNB counsel as saying.