Lenders nominate a resolution professional to administer under stress Essar's Mahan project.

Lenders to Essar Power Mahan have nominated a resolution professional (RP) to manage the company's affairs and are likely to approach the National Company Law Tribunal (NCLT) to kickstart insolvency proceedings against the thermal power producer, according to sources in the know.

The lenders that include ICICI Bank and Punjab National Bank have picked Jet Airways' current administrator Ashish Chhawchharia to manage the affairs of the Essar power plants located in the Singrauli district of Madhya Pradesh, sources said. Essar Power Mahan has power supply contracts with Essar Steel.

Though ICICI Bank had filed an application to initiate insolvency against the company almost two years ago, the application is yet to be admitted by the NCLT.

"Essar Power Mahan has proposed a fair time bound debt resolution plan to its lenders. The project is one among many power projects being considered by the lenders for restructuring," an Essar spokesperson said in response to ET's queries.

The spokesperson noted that Essar Group has been actively reducing its debt.

ET