NCLT Hyderabad Approves The Resolution Plan Of Jindal Saw Ltd. For Sathavahana Ispat Ltd.

The National Company Law Tribunal (“NCLT”), Hyderabad Bench, comprising of Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri Charan Singh (Technical Member), while adjudicating a petition filed in M/s Thirumala Logistics v M/s Sathavahana Ispat Limited, has approved the resolution plan of Jindal Saw Limited for Sathavahana Ispat Limited. The approved Resolution Plan proposes to merger of Jindal Saw Ltd. for Sathavahana Ispat Ltd. Background Facts M/s Sathavahana Ispat Ltd. (“Corporate Debtor”) is engaged in the business of in the manufacture and sale of (i) Pig Iron with a rated capacity of 210,000 tpa; (ii) Metallurgical Coke with a rated capacity of 450,000 tpa and (iii) co-generation cum thermal power of 50 MW. M/s Thirumala Logistics (“Operational Creditor”) filed a petition under 9 of Insolvency and Bankruptcy Code, 2016 (“IBC”), seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor. On 28.07.2021, the Adjudicating Authority (NCLT) admitted the petition and initiated CIRP against the Corporate Debtor. Shri Golla Ramakantha Rao was appointed as Interim Resolution Professional (IRP), and subsequently replaced by Mr. Bhuvan Madan as the Resolution Professional. The Committee of Creditors (“CoC”) comprised of sole Financial Creditor i.e. M/s J.C. Flowers Asset Reconstruction Pvt. Ltd. Upon invitation of Expression of Interest, the Resolution Professional received resolution plans from Vedanta Limited and Jindal Saw Limited. Jindal Saw Ltd. belongs to the P.R. Jindal group and is engaged in the business is of manufacturing Submerged Arc Welded (SAW) pipes and Spiral pipes for various industrial Sectors. On 09.03.2022 the CoC instructed the Resolution Professional to inform the Resolution Applicants to enhance their financial offer and submit their revised resolution plans. While Vedanta Limited expressed its inability to improve the offer, Jindal Saw Limited increased their offer by Rs. 45 Crores. Thereafter, on 28.10.2022 the NCLT directed the Resolution Professional to examine the relevancy of the Supreme Court judgment in in re State Tax Officer Vs Rainbow Papers Limited, Civil Appeal 1661 of 2020, to the resolution plan submitted by Jindal Saw Ltd. Accordingly, the Resolution Professional informed the CoC that the list of creditors has been updated and the claims of the government departments, who submitted their claims post filing of the application for approval of resolution plan, were admitted. It was further decided to consider the dues of the Government as ‘secured debt’. In view of the proposed modifications, the CoC again requested Jindal Saw Limited to further enhance its offer under the resolution plan and the request was complied with. The CoC approved the revised resolution plan of Jindal Saw Limited (“Successful Resolution Applicant/SRA”) with 100% votes. Outlay of the Resolution Plan The Resolution Plan involves merger of the Corporate Debtor with the SRA and the plan is valued at Rs. 693,60,76,158/-. The Secured Financial Creditors are proposed to be paid Rs. 672.22 Crores as against a claim of Rs. 1747 Crores. The workmen and employees of Corporate Debtor are being paid the claimed amount in full. The Operational Creditors are being paid Rs. 1 Crore as against an admitted claim of Rs. 64,70,06,108/-. The Government is being treated as a secured creditor and being paid Rs. 12.40 Crores as against a claim of Rs. 32.22 Crores. In total, Rs. 693.62 Crores is being paid as against a total claim of Rs. 1954.98 Crores. NCLT approves the resolution plan of Jindal Saw Limited The Resolution Professional filed an application under Section 30(6) of IBC before the NCLT, seeking approval of the SRA’s Resolution Plan. On 31.02.2023, the NCLT approved the Resolution Plan of SRA. Case Title: M/S Thirumala Logistics v M/S Sathavahana Ispat Limited Case No.: CP (IB) NO. 17/9/HDB/2020 Counsel for Applicant: Shri S. Ravi, Senior Counsel assisted by Shri Shashank Agarwal, Advocate. Counsel for SRA: Shri Vijay K. Singh, Advocate Counsel For COC: Shri Shubhabrata Chakraborti, Advocate. Click Here To Read/Download Order

NCLT Hyderabad Approves The Resolution Plan Of Jindal Saw Ltd. For Sathavahana Ispat Ltd.

Pallavi Mishra

Tags