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2 Indian companies told to pay up defaults

In a precedent-setting ruling, the High Court of Justice, London, ordered two Indian companies – software firm Geodesic and oil and gas exploration firm Shiv-Vani Oil & Natural Gas – to pay $171 million and $84 million respectively, (aggregating to Rs 1,600 crore) to its lenders along with interest by end of February. The two companies had defaulted on their foreign currency convertible bonds. This is the first such court directive where offshore lenders have received a favourable order against their Indian borrowers in a foreign jurisdiction. The trustees of bondholders Citibank London branch and Citicorp International (in the cases of Geodesic and Shiv-Vani Oil & Gas Exploration Services, respectively) approached the High Court of Justice, Queen’s Division, London, to recover the due amount from both the companies. As per the order passed by the UK court, Mumbai-headquartered IT product company Geodesic will have to pay $171 million towards dues, including default interest and additional $39,266 (Rs 24.41 lakh) per day from February 2014 as default interest till date of payment. The court has also directed company to pay £1,22,500 (Rs 1.27 crore) as legal costs. In another order, it directed Shiv-Vani Oil & Gas Exploration to pay $84 million on or before 24 February to the FCCB lenders along with $2.2 million (Rs 13.68 crore) interest towards defaulted dues.

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