NCLAT orders status quo on Coastal Energen insolvency resolution process

The National Company Law Appellate Tribunal (NCLAT), Chennai on Friday (September 6, 2024) ordered status quo to be maintained as on date in the matter of Corporate Insolvency Resolution Process of Coastal Energen Private Limited, based on an appeal filed against the approval of a ₹3,335.52 crore (excluding resolution process cost) resolution plan submitted by Dickey Alternative Investment Trust and Adani Power Limited consortium for the company.

NCLAT Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain directed the resolution professional Radhakrishnan Dharmarajan to run the Coastal Energen plant and maintain the resolution amount in a separate account until the case is decided on merits.

The NCLAT has posted the case for further hearing on September 18, 2024.

Interestingly, the development comes even as the Dickey Alternative Investment Trust (DAIT) and Adani Power consortium have already implemented the resolution plan and taken over Coastal Energen.

Last month, the National Company Law Tribunal (NCLT) Chennai gave the nod for Dickey Alternative Investment Trust and Adani Power resolution plan for Coastal Energen, which owns and operates an imported coal-based thermal power plant at Tuticorin, Tamil Nadu. As per the approved resolution plan, secured lenders of Coastal Energen will get about ₹3,330 crore, which is 28.52% of the admitted claims of about ₹11,677 crore.

Against the NCLT nod, Ahmed Buhari, erstwhile director of Coastal Energen, moved an appeal before the NCLAT, alleging that the due process was not followed in picking the DAIT and Adani Power consortium as the successful bidder under the insolvency and bankruptcy process.

NCLT admitted Coastal Energen for the corporate insolvency resolution process via an order dated February 4, 2022, following a case filed by the State Bank of India, and had appointed Radhakrishnan Dharmarajan as the resolution professional.