India’s National Company Law Appellate Tribunal (NCLAT) on Friday ordered to maintain the status quo on the insolvency resolution of Coastal Energen Private Ltd.

The Chennai bench of the NCLAT passed the order after Coastal Energen’s former director Ahmed Buhari challenged the National Company Law Tribunal’s (NCLT) approval for 3,335.52 core rupees (about $400 million) resolution plan submitted by the consortium of Dickey Alternative Investment Trust and Adani Power Ltd.

Buhari had approached the bankruptcy appellate tribunal against the NCLT order, alleging the due process was not followed in selecting the Dickey Alternative-Adani Power consortium as the successful bidder for Coastal Energen under the country’s bankruptcy law.

The NCLAT’s Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain in a hearing today ordered Coastal Energen’s resolution professional Radhakrishnan Dharmarajan to manage the power producer’s operations.

The bench also asked Dharmarajan to keep the resolution amount in a separate account until the case is decided on merits. The NCLAT is set to hear the matter on 18 September.

The written order is yet to be posted on the NCLAT’s website.

The development comes even as Coastal Energen’s winning consortium last month completed the company’s acquisition in terms of the resolution plan.

In December 2023, Adani Power said its consortium secured the approval from Coastal Energen’s committee of creditors to acquire the bankrupt company.

The NCLT admitted an insolvency petition against Coastal Energen on 4 February 2022 after its financial creditor State Bank of India approached the tribunal, claiming default.

Total admitted claims by the company stood at 12,247.55 crore rupees as of 31 August 2023, according to Coastal Energen’s website.

Coastal Energen, the power generating flagship company of Coal and Oil Group, operates a 1,200-megawatt coal-fired thermal power plant in Tuticorin district in the southern Indian state of Tamil Nadu.

Note: $1 = 83.9884 Indian rupees

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India Watch List For Thursday - June 22