CG Power’s revival, Bachchan-style

The Insolvency and Bankruptcy Code (IBC) has been one of the defining legislation for the Indian corporate sector ever since it was enacted in 2016.

- JYOTI MUKUL

Especially in sectors such as power and steel, IBC put on the block a number of companies that had been declared bankrupt. While lenders took control, choosing the suitor for the beleaguered company was the task delegated to resolution professionals under the Code. Companies in distress due to financial frauds, sectoral down-cycles or huge debt found themselves being recast and sold to new buyers. CG Power, however, followed a different route when financial problems broke out in the company.

Natarajan Srinivasan, who was appointed managing director and chief executive officer of CG Power in 2020, has put together a chronicle of the journey of turning around the distressed company. The Great Revival tells this story with all the nuance of a corporate leader who has been involved in reviving distressed companies.

The saga begins with the Ministry of Corporate Affairs ordering an investigation of CG Power and its subsidiaries in December 2019. It had earlier sought reopening and recasting CG Power's financials by an independent chartered accountant firm. By March 2020, the book value per share of the company declined to a negative %31.21 from %55.2 in March 2012. There was no working capital to pay interest or repay loans.