The Ashok Punj-owned PSL Limited, the largest manufacturer of pipes in India, has filed for insolvency under the Insolvency and Bankruptcy Code, 2016. It owes Rs 4,000 crore to 24 banks and other institutions, including foreign lenders, according to a person in the know of the matter.

PSL had filed for reference to the Board of Industrial and Financial Restructuring (BIFR) in 2015. Subsequently, the matter was transferred to the National Company Law Tribunal (NCLT). The IBC permits transfer of cases from the BIFR. In this case, the company filed the application under Section 10 of the IBC.

“Leading banks have exposure to the company and Edelweiss Asset Reconstruction Company (ARC) has bought part of the exposure from these banks,” said the person quoted above. Edelweiss ARC has acquired ICICI Bank’s Rs 485-crore loan, Axis Bank’s Rs 38-crore loan and State Bank of India’s Rs 792-crore loan. Tata Capital Financial Services, Aditya Birla Finance, Syndicate Bank, Exim Bank, Punjab National Bank (PNB), Bank of India (BoI), Bank of Baroda (BoB) and IDBI Bank are some of the lenders to PSL. The total number of lenders is 26.

According to sources, Acreage ARC bought DBC Bank’s loan of Rs 63 crore. Canara Bank, Union Bank, and Standard Chartered Bank are the leading creditors to the company. PSL did not respond to emailed queries till the time of going to press.

The company had approached its bankers for a corporate debt restructuring (CDR) in 2013 after it failed to repay loans. The CDR could not be put in place.

PSL made losses of Rs 697 crore in 2016-17. The company’s financial distress began in 2012-13 as orders dried up due to a delay in the implementation of the natural gas grid and excess capacity in the industry, according to its annual report for 2015-16. This case involves foreign lenders and will deal with cross-border insolvency. The foreign lenders include the foreign branches of some leading Indian banks like BoB, BoI and PNB. Other foreign lenders include Bank of Bahrain and Kuwait and Abu Dhabi Commercial Bank.

IRR Insolvency Professionals Pvt Ltd has been appointed as the interim resolution professional. At the end of Thursday’s trade session, PSL’s stock was down by 0.40 per cent at Rs 4.95 per share.