Sterling Oil admitted for bankruptcy

The bankruptcy court has admitted Sterling Oil Resources Ltd under the corporate insolvency resolution process following a plea by its financial creditor, State Bank of India (SBI).

SBI had moved the bankruptcy court after the company defaulted on its dues of nearly ₹1,655 crore. The Mumbai bench of the National Company Law Tribunal (NCLT) has appointed Purusottam Behera as the insolvency resolution professional to carry out the function under the Insolvency and Bankruptcy Code, 2016.

“This bench is of considered view that financial debt… is in existence; there is no stay on the enforcement of decree… and there is a default in payment of a such debt,” observed the division bench of judicial member Kishore Vemulapalli and technical member Prabhat Kumar in its order of May 16.

In this case, SBI, as a member of the consortium of banks, had provided a standby letter of credit facility to Mauritius-based Sterling Global Oil Resources Ltd in April 2014, while Sterling Oil Resources had provided securities and undertaking as the holding company.