The National Company Law Tribunal (NCLT), Mumbai, has halted Reliance Infrastructure’s attempt to revive its subsidiary, SU Toll Road, after concerns emerged over responsibility for pending maintenance work on a key highway project.
The tribunal’s decision centres on the resolution applicant’s refusal to take up the cost of outstanding road repairs. Since the proposed revival plan did not provide for these obligations, the arrangement could not move forward, leaving the company’s resolution process at an impasse.
The development has also raised questions about the future management and maintenance of the 136-kilometre Salem–Ulundurpet highway in Tamil Nadu. The National Highways Authority of India (NHAI) intervened in the matter, highlighting the lack of clarity over which party would be responsible for completing the overdue repair work.
The uncertainty surrounding these maintenance obligations became a significant concern, as the highway’s upkeep is essential to the smooth functioning of the project. Without a clear commitment on repairs, the proposed resolution plan faced difficulties in securing approval.
Following the tribunal’s decision, lenders have been given 15 days to determine the next course of action. They will need to assess whether the existing resolution process can be reconsidered or whether fresh bids should be invited from prospective applicants.
If lenders decide to restart the bidding exercise, the process could take an additional 120 days, potentially extending the timeline for resolving the subsidiary’s financial and operational issues.
The ruling marks a setback for Reliance Infrastructure’s efforts to revive SU Toll Road. The immediate priority for lenders will be to establish a clear framework for addressing the pending repair obligations and deciding how the highway project should proceed.
Source: News Bytes App
