Sunil Hitech Holds the Government and Private Companies Responsible for its Insolvency Case
Sunil Hitech Engineers Ltd is facing insolvency case by American Express for a due amount of Rs. 45 crores. It blames MORTH, Mahagenco, BHEL, NTPC, other government bodies and private players for the situation, as they owe more than Rs. 600 crore to Sunil Hitech, making it difficult for the company to revive funds to pay for the dues in time.
- (1888PressRelease) September 28, 2018 - Sunil Hitech Engineers Ltd is a reputed infrastructure company. However, it is facing an insolvency petition by the American Express. Sunil Hitech blames the corporate giants and government agencies as the root cause for the situation, as they delayed realizing the dues in time. A source from the company’s management circle told that they have been awaiting payments from NTPC, MORTH (Ministry of Road Transport and Highways, Mahagenco, and BHEL.
The source confided that the delay has affected cash-flow, because of which the company could not honour the liabilities, leaving Rs. 45 crore due to American Express.
Government and Private Players Owe Rs. 600 crore to Sunil Hitech
Sunil Gutte, the company’s managing director has affirmed the looming crisis, but holds the government and private players responsible. He claimed that government and private players did not make payments worth Rs. 600 crore. He also said that majority of dues are from the PSUs and MORTH. A few sources from the company’s board admitted that this delay caused cash-crunch, leading to payment default towards the creditors.
As per Sunil Hitech, BHEL and NTPC together owe about Rs. 100 crore, National Highways Authority of India (NHAI) and MORTH owe Rs. 50 crore, while some power utilities of the state and Mahagenco owe over Rs. 100 crore, to the organization. Remaining dues are to come from private players such as L&T, Reliance Energy, Gammon India and Jhabua Power, among others.
It is revealed that additional Rs. 1,200 stays locked in arbitration with both private clients and the government. The due amount is pending since one-and-a-half-years, pushing the company over the brink and making it to the debtor’s list.
Default in Payments by Responsible Parties Makes Sunil Hitech Lose New Projects
The firm has passed on the GST components of the receivable. However, it has not been able to realize the amount from the debtors. Given the crisis, Sunil Hitech was not able to take up new projects worth Rs. 2,000 crore. The bank guarantees could not be secured, reason being bearish condition of the economy, which also prevented the company from looking for exposure in the sector.
Due to lack of aggregates (one of the materials required for road-building), the road project work in Bihar has slackened. The aggregates cannot be quarried in Bihar, but have to be sourced from Jharkhand. The road work is hampered, because the materials have to be transported by railways based at 500 Kms distance, but the company is finding it difficult to get rakes.
Currently, the insolvency petition moved by the American Express is in process. Sunil Gutte has said that the company will take part in the proceedings of the case by allying with their strategic investors, but the debt-situation has been created because of the private players and government not making the necessary payments.
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