HYDERABAD: In a setback to the GVK group, the National Company Law Tribunal (NCLT) at Hyderabad has declared its flagship companyGVK Powerand Infrastructure Ltd (GVKPIL) asbankruptand initiated corporate insolvency resolution process (CIRP) for defaulting on a loan (including interest) of Rs 18,000 crore toICICI Bankand a few other banks.The loan was availed by GVK Coal Developers (Singapore) Pte Ltd over a decade ago for which GVKPIL was the guarantor.The NCLT bench comprising Rajeev Bhardwaj, member (judicial) and Sanjay Puri member (technical) pronounced the order on July 12, which was released on Monday, in a petition filed by ICICI in 2022.Appearing for ICICI, senior counsel K Vivek Reddy cited a London court judgment in Oct last year to press for insolvency proceeding against GVKPIL. “The first default happened in Feb. 2017 and it is still continuing. GVKPIL is liable as a guarantor for the loan taken by GVK Coal and this liability was affirmed by the London court. Since GVK has failed to make any payments, bankruptcy is the natural course of action,” he said.It was in Sept 2011 that ICICI Bank (Dubai, Bahrain and Singapore branches) along with Bank of Baroda (Ras Al Khaimah), Bank of India (London and Singapore) and Canara Bank (London) sanctioned a term loan facility of Rs 8,356 crore and a letter of credit for Rs 292 crore to GVK Coal for acquiring coal mines in Australia. Some others banks also sanctioned term loans of Rs 367 crore through a facility agreement in March 2014 which was subsequently increased to Rs 2,089 crore.In March 2016, ICICI came to know that GVK Group was planning to sell its stake in Bangalore International Airport Limited without the consent of lenders in violation of the facility agreements. The banks subsequently filed an injunction application in April 2016 in a London court where GVK gave an undertaking that it will not sell its stake in Bangalore airport.Subsequently, due to non-payment of loan, the lender banks filed claim pleas before the London court for Rs 5,915 crore under facility agreement-I and for Rs 1,236 crore under facility agreement-II.Later, ICICI also invoked its corporate guarantee by issuing a notice in Nov 2020 to guarantor GVKPIL, demanding a sum of Rs 5,000 crore towards principal and interest. In reply, GVKPIL expressed its inability to honour the payments while committing to repay it after working out a solution with the Adani Group. It also requested the bank not to take any action.In 2022, however, ICICI approached the NCLT for initiating insolvency proceeding against GVKPIL.On Friday, the NCLT held that as on June 13, 2022, GVKPIL was liable to pay Rs 15,576 crore comprising principal Rs 9,463 crore, interest Rs 6,113 crore and agency fee Rs 1.23 crore. It also appointed Satish Kumar Gupta as the interim resolution professional to take the CIRP forward.