NCLT Delhi Approves Resolution Plan of Ramkrishna Forgings Ltd For ACIL Ltd.

The Resolution Plan is valued at Rs. 129.5 Crores, while the total admitted claims of the Corporate Debtor amounts to Rs. 1,782 Crores.

Background Facts

ACIL Ltd. (“Corporate Debtor”) is engaged in manufacturing of high precision engineering automotive components such as crankshafts for tractors, HCV, LCV, two wheelers and also manufactures connecting rods, steering knuckles and hubs. The Corporate Debtor supplies to automobile manufacturers like John Deere Ltd, New Holland Tractor Ltd, SML Isuzu Ltd, International Tractors Limited, Honda Motorcycles & Scooters India Limited, Maruti Suzuki India Limited, Escorts Ltd., etc.

On 08.08.2018, the NCLT admitted the Corporate Debtor into Corporate Insolvency Resolution Process (“CIRP”).

M/s Ramkrishna Forgings Limited (“Successful Resolution Applicant/SRA”) is a manufacturer of open and closed die forgings of carbon and alloy steel, micro alloy steel and stainless steel forgings, which can be supplied in As Forged + Heat Treated + Machined and Fully assembled condition.

The SRA supplies to sectors like Automotive, Railways, Farm Equipment, Bearings, Oil & Gas, Power and Construction, Earth Moving & Mining, both in India & overseas markets. It is also a critical safety item supplier for Screw Coupling, Bolster suspension, Side frame keys and Draw Gear Assembly for Railway Coaches and wagon.

The SRA submitted a Resolution Plan for the Corporate Debtor, which was approved by the Committee of Creditors (“CoC”) with a majority voting share of 88.56%. Accordingly, the Resolution Professional filed an application under Section 30(6) of IBC before the NCLT, seeking approval of the Resolution Plan.

Outlay Of The Resolution Plan

The average fair value of the Corporate Debtor is Rs. 130.5 Crores and average Liquidation value is Rs. 101.70 Crores.

The claims submitted by the Corporate Debtor's creditors were admitted by the Resolution Professional to the extent of Rs. 1,782 Crores. The Resolution Plan of SRA is valued at Rs. 129.5 Crores.

The Resolution Plan proposes to pay Financial Creditors Rs 80.44 crore in upfront payment and an additional Rs 24.5 crore worth of Non-Convertible Debentures (NCDs).

the resolution plan proposes to pay the Secured Financial Creditors an amount of Rs. 104.2 Crores against an admitted claim of Rs. 1,704 Crores. The Unsecured Financial Creditors an amount of Rs. 70 Lakhs against an admitted claim of Rs. 56.8 Crores. The Government dues have been allocated Rs. 16.2 Lakhs as against an admitted claim of Rs. 16.2 Crores. The other Operational Creditors have been paid Rs. 20.3 Lakhs against their admitted claim of Rs. 29.2 Crores.

The resolution plan proposes to utilize Rs 4.19 crore towards gratuity liability of Corporate Debtor. Further, Rs 20 crore would be infused towards capital expenditure, working capital requirements and improvement and stabilization of the Corporate Debtor.

NCLT Verdict

The Bench has approved the Resolution Plan of M/s Ramkrishna Forgings Limited for the Corporate Debtor.

Case Title: IDBI Bank Limited v M/s ACIL Limited

Case No.: CP IB-170/PB/2018

Counsel for SRA: Sr. Adv. Krishnendu Datta, Adv. Prateek Kumar, Adv. Raveena Rai, Ad. Smriti Nair.

Counsel for RP: Adv. Sumant Batra, Adv. Abhishek Sharma, Adv. Kritya Sinha, Adv. Raghav Mittal, Adv. Kushagra Kaul, Ravindra Loonkar.

Counsel for CoC: Rajive R. Raj, Adv.

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