Instructions for interim distribution of 75 percent of the amount of escrow account to the lenders of ITNL's unit

The National Company Law Appellate Tribunal (NCLAT) has ordered lenders of IL&FS Transportation Networks Ltd (ITNL) promoted Baleshwar Kharagpur Expressway Ltd (BKEL) to make an interim payment of 75 per cent of the total amount deposited in an escrow (third party) account.

Passing the order on a plea filed by State Bank of India (SBI), NCLAT said it did not find any reasonable ground for the board not to take any decision for interim distribution in accordance with the concession agreement and the escrow agreement.

“As per the escrow agreement, an interim distribution of 75 per cent of the amount lying in the escrow account shall be made to the lenders,” NCLAT said in its order.

The remaining amount will be used for operations, maintenance and other payments.

However, it added, “The lenders shall also have to give an undertaking to refund the amount received, if it is found that they were not entitled to the amount received.”

SBI had requested NCLAT to allow it to make an interim distribution of Rs 175 crore to lenders against the guarantee from the funds lying in BKEL's escrow account.

BKEEL did not repay its loan after January 31, 2020, and as of September 14, 2023, Rs 236.82 crore was lying in the company's escrow account.

In the joint meeting, the lead bank as well as other banks requested for interim distribution of cash available with the company.

BKEL is a special purpose vehicle promoted by ITNL. It was formed for the development of road project in Balasore-Kharagpur section of NH-60 in Odisha and West Bengal.

Read this also :-

Whoever becomes the President of America, Elon Musk will have a great time