6 banks sue Hyd-based GVK Group's firm for defaulting on $1.5bn loan

According to reports, GVK did not make certain repayments after it failed to get a mining lease by 31 December 2012 in the Alpha project in Australia’s Queensland.

By Newsmeter Network  Published on  13 Jun 2022 2:25 PM GMT
6 banks sue Hyd-based GVK Groups firm for defaulting on $1.5bn loan

Hyderabad: Six Indian banks – Canara Bank, ICICI Bank, Bank of Baroda, Bank of India, Axis Bank, and Indian Overseas Bank – have sued Singapore's GVK Coal Developers for Rs. 12,114 crores ($1.5 billion) plus interest in the London High Court, according to reports.

The banks have sued the Hyderabad-based GVK Group-owned GVK Coal Developers over a dispute on a $1 billion loan and $35 million letter of credit facility that five banks lent to the company in 2011 and a $160 million loan lent in 2014, the report said. The banks have claimed that GVK defaulted on all these loans.

Nine other GVK Group firms, which were guarantors for the loans, are also being sued in the case that will open on Monday. Out of nine, seven firms are based in Singapore and the other two in India's Secunderabad.

The conglomerate has denied breaching the agreement. It has also denied owing the $1.5 billion loan.

According to reports, GVK did not make certain repayments after it failed to get a mining lease by 31 December 2012 in the Alpha project in Australia's Queensland. The project was a milestone that had to be satisfied, the banks added.

They wrote to GVK in November 2020, informing them that they had cancelled the agreement and requested for repayment, the banks said. However, neither GVK nor any of its guarantors paid back the sum owed by them, the six banks said.

While GVK said that it failed to get the lease due to litigation by environmental groups, it denied a "default."

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