Gensol defaults on BluSmart-linked bond repayment for May
Gensol Engineering
, promoted by the founders of electric mobility firm
BluSmart
, has defaulted on payment of around ₹4 crore to its pass-through certificates (
PTCs
) holders this month.
The last repayment that was processed successfully was in April, people aware of the matter said.
The troubled solar engineering, procurement and construction company had raised these funds by issuing PTCs, which were distributed to retail investors via online platform Grip Invest. PTCs are usually loans that are raised in lieu of any underlying asset. In this case, the company had offered vehicles plied on the BluSmart platform as collateral for these loans.
As the vehicles plied and generated revenue, repayments were processed out of that cash flow. Now, as the BluSmart cab service stopped and deal talks with ride hailing platform Uber and fleet operators are yet to come to fruition, the loan repayment has become uncertain.
Confirming the development, Grip Invest founder Nikhil Agarwal said that while the total issue size was ₹5.6 crore, 56per cent of the principal amount has been repaid by Gensol and currently the outstanding is ₹4.04 crore.
These loans were secured against 76 vehicles that were previously run on the BluSmart platform.
On May 29, the Delhi High Court passed a final order and gave Vriksh Advisors, the lessor, the right to operate, sell or lease the assets.
'All vehicles are now in the possession of the lessor. The same have been inspected and found to be in good working order,' Aggarwal told ET.
Vriksh Advisors is a subsidiary of Grip Invest.
Aggarwal said the company has taken possession of the vehicles, inspected them, created charging facilities and is now in talks with fleet operators looking to deploy these vehicles on ride sharing platforms.
A senior industry insider, however, said the repayment structure for PTCs might change even if the vehicles start running.
'Commissions, revenues, pricing and all the other factors would not remain the same across all platforms, so those things will need to be considered before starting the repayment schedule,' he pointed out.
Vriksh Advisors is in the process of finding the best suitable buyer of the assets, so they can be used to repay the loans taken against them, people cited above said.
'People invested in BluSmart bonds and PTCs thinking of the cab services, which had a big brand value, and they were also attracted to the high returns offered by these instruments,' said an investor who has exposure to BluSmart bonds.
According to a credit rating document issued by Care Edge Ratings on Tuesday, these bonds issued in 2023 were due to mature in 2027 and offered a coupon rate of 13.6per cent .
ET had reported on April 21 that BluSmart investors were expecting major defaults on bonds they had purchased via platforms like Yubi, Centricity and others. The ride-hailing company had issued more than ₹100 crore worth of bonds over the last one year.
The investor quoted above said that more than ₹80 crore of NCDs are due for repayments from BluSmart.
This comes at a time when the Gensol promoters Anmol Singh Jaggi and his brother Puneet Singh Jaggi are under investigation for siphoning off funds from the company for personal consumption. While BluSmart has halted its operations, Gensol's bank accounts have been frozen under directives from the National Company Law Tribunal, Ahmedabad.
State-run
Indian Renewable Energy Development Agency
(Ireda) last week said it has moved the Debts Recovery Tribunal, Delhi, against
Gensol Engineering
and its arm Gensol EV Lease, claiming a default of about ₹729 crore. Ireda had earlier filed an insolvency petition against Gensol.
The entire saga started after market regulator Sebi kicked off an investigation into Gensol Engineering following a stock manipulation complaint it received in June 2024. Its findings showed that the
Jaggi brothers
diverted loans Gensol took to procure electric vehicles for personal use.
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