NCLT Mumbai Approves Resolution Plan For Topworth Steel & Power Pvt. Ltd., A Topworth Group Company

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Justice V.G. Bisht (Retd.) (Judicial Member) and Shri Prabhat Kumar (Technical Member), while adjudicating a petition filed in State Bank of India v Topworth Steel and Power Private Ltd., has approved the Resolution Plan submitted by Amalgam Steel and Power Ltd. for Topworth Steel and Power Pvt. Ltd. The Resolution Plan is valued at Rs. 260 Crores, while the total admitted claims of the Corporate Debtor amounted to Rs. 3,499 Crores. Background Facts Topworth Steel and Power Pvt. Ltd. (“Corporate Debtor”) was incorporated in 2004 as a flagship company of the Topworth Group of companies, promoted by Mr. Abhay Narendra Lodha. The Steel Plant of the Corporate Debtor is situated in Chhattisgarh and the manufacturing set up includes Sponge Iron, Steel/Billet, Rolling Mill, Captive Power Generation and Solar Power. On 29.01.2020, the NCLT initiated Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor. Amalgam Steel and Power Limited (“Successful Resolution Applicant/SRA”) is a joint venture formed between Atha & Misra Group. 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 89.61%. 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 claims submitted by the Corporate Debtor’s creditors were admitted by the Resolution Professional to the extent of Rs. 3,499 Crores. The Resolution Plan of SRA is valued at Rs. 260 Crores. The average fair value of the Corporate Debtor is Rs. 345 Crores and average Liquidation value is Rs. 238 Crores. The resolution plan proposes to pay the Secured Financial Creditors an amount of Rs. 236 Crores against an admitted claim of Rs. 2,672 Crores. The Unsecured Financial Creditors will be paid Rs. 97 Lakhs against their admitted claims of Rs. 257 Crores. The Operational Creditors (Employees & Workmen) will be paid their admitted claims in full amounting to Rs. 1.16 Crores. The Operational Creditors other than workmen and employees are to be paid Rs. 2 Crores against their admitted claim of 568 Crores. NCLT Verdict The Bench has approved the Resolution Plan of Amalgam Steel and Power Limited for the Corporate Debtor. Case Title: State Bank of India v Topworth Steel and Power Private Ltd. Case No.: CP (IB) No. 590/MB/C-I/2018 Counsel for Resolution Professional: Mr. Chetan Kapadia, Senior Advocate a/w Mr. Nausher Kohli and Dhrupad Vaghani, Advocates Counsel for Resolution Applicant: Mr. Shyam Kapadia, Advocate Counsel for CoC and others: Mr. Madhav, Advocate i/b Cyril Amarchand Mangaldas and Ms. Nikita Abhyankar, Advocate i/b Gravitas Legal. Click Here To Read/Download Order

NCLT Mumbai Approves Resolution Plan For Topworth Steel & Power Pvt. Ltd., A Topworth Group Company

Pallavi Mishra

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