NCLAT Stays Anil Agarwal-Led Twin Star's Takeover Bid For Videocon Industries

The National Company Law Appellate Tribunal on Monday stayed industrialist Anil Agarwal-led Twin Star Technologies’ Rs 2,962.02 crore-takeover bid for debt-ridden Videocon Industries over the pleas filed by two dissenting collectors.

A two-member NCLAT bench headed by its Officiating Chairperson Justice A I S Cheema stayed the order handed by the National Company Law Tribunal on June 9 and directed to take care of “status quo ante” as earlier than passing of the order, until the following date of listening to.

The NCLAT order came to visit the petition filed by two dissenting collectors — Bank of Maharashtra and IFCI Ltd — contending that as per the legislation, they may not have been paid lower than the liquidation worth.

Petitioners additionally raised the problem relating to the potential breach of the confidentiality of the liquidation worth in the course of the insolvency means of Videocon Industries.

The NCLT had in its June 9 order had noticed that the liquidation worth of the 13 Videocon group firms and backbone plan worth had been surprisingly very shut, they submitted.

Moreover, it was additionally identified that the NCLT, in its order had noticed that Twin Star”s decision plan offered a haircut of just about 90 to 96 per cent.

The plan offered Rs 2,900 crore for admitting legal responsibility of Rs 65,000 crore and the waiver itself was Rs 62,100 crore, whereby public cash has been misplaced and the monetary collectors have been settled for merely 5 to 10 per cent, they submitted.

“Considering the observations of the Adjudicating Authority (NCLT) and the submissions made by the senior Counsel for Appellants in both these Appeals and the grounds raised in these Appeals, and considering the exceptional facts of the present matter the Impugned Order is stayed till the next date and status quo ante as before passing of the Impugned Order is directed to be maintained,” the NCLAT said.

It further said the resolution professional will continue to manage the Videocon Group companies as per provisions of the IBC (Insolvency and Bankruptcy Code) till the next date.

“Respondents in each these Appeals to file Reply-Affidavits inside two weeks. Rejoinder, if any, could also be filed inside per week, thereafter,” the NCLAT said.

It has also allowed the parties to file brief ‘Written-Submissions’ not more than three pages and ‘Copies of Judgments’ which they want to refer or rely on, within three weeks.

The NCLT has conducted a combined insolvency resolution process for Videocon Industries and its 12 other group companies.

The appellate tribunal also observed that “prima facie perusal of the file reveals that liquidation worth is said to be Rs 2,568.13 crore” and the fee proposed beneath the decision plan is Rs 2,900 crore, which incorporates an upfront fee of Rs 200 crore and NCD of Rs 2,700 crore.

“It is also argued that it is matter of concern that the corporate debtors (Videocon Group) in the consolidated proceedings had cash of Rs 200 crore and the SRA (Twin Star) would bring in just 262 Crores and from that also first payment of Rs 200 Crores will be brought in 25 Months. Beyond Rs 262 Crores the rest was being brought in only by way of NCDs to be paid in six years,” the NCLAT order mentioned.

During the proceedings, dissenting collectors additionally pointed that what’s proposed to be paid can be solely half in money and a serious half is within the type of NCDs.

They raised questions as as to whether as an alternative of paying money, NCDs might be issued. 

Though Star Lite”s decision plan offered that NCDs can be issued, the NCLT directed fee of money, which amounted to a change within the accredited decision plan and it couldn’t have been performed with out sending again the matter to CoC. 

However, counsel showing for Twin Star and the decision skilled supported the NCLT orders and said that though the NCDs had been said within the decision plan, as directed by the Adjudicating Authority the fee will be by the use of money.


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