Power plants in India to face bankruptcy

MUMBAI - Nearly 40 power plant companies of India were diving to bankruptcy, local media report on Wednesday.

According to the Economic Times, power plants belonging to Jindal and telecom tower firm GTL and petrochemical maker JBF Industries will head to bankruptcy courts in the next 15 days as the central bank-set deadline for resolution came to an end at midnight on Monday.

Nearly 40 organizations which have defaulted on loans of more than $285.06 million but avoid getting into the goals procedure, would be casualties of the Reserve Bank of India's Feb. 12 roundabout that gave 180 days to banks to solve defaults.

Currently, banks have a 15-day window to start the legitimate procedure to recuperate their assets.

According to the Money Control's report, after the Allahabad High Court judgment on Aug 27 declining interim relief to power companies from escaping insolvency proceedings, bankers fear more hair-cuts on their loans.

Provisions could also see a minor increase once the assets are referred to the National Company Law Tribunal (NCLT). The provision is written back in case of the loan recovery, the report added.