In a shocking turn of events, six Indian banks, Bank of Baroda, Bank of India, Canara Bank, ICICI Bank, Indian Overseas Bank and Axis Bank are suing Indian corporate GVK Coal Developers (Singapore) (GVK) - part of the GVK group - for $1.5 billion plus interest, in the London High Court.
The banks state in their claim that GVK failed to make certain repayments as they fell due and failed to obtain a mining lease in the Alpha project in Queensland, Australia by December 31, 2012, which was a project milestone that had to be satisfied. The banks wrote to GVK in November 2020 cancelling the agreement and requesting repayment but neither GVK, nor its guarantors, has paid any of the sums owed, the banks claim.
Nine other GVK group companies which were guarantors for the loans, are also being sued in the case. GVK denies it is breach of the agreements and denies that $1.5 billion is owed.
The dispute is over a $1 billion loan and $35 million letter of credit facility that five of the banks lent to GVK in 2011, plus a $160 million loan lent to GVK in 2014, that the banks claim GVK defaulted on.
