Calcutta: Naveen Jindal's Jindal Steel & Power has thrown a spanner to the novel revival plan hatched by Gujarat NRE Coke's erstwhile promoter Arun Kumar Jagatramka.
JSPL has received an ex-parte order from the National Company Law Appellate Tribunal, Delhi, which stayed the proposed meeting of shareholders and creditors on July 16.
The back-to-back meetings of shareholders, foreign currency bond holders, secured and unsecured creditors were called according to an order of the NCLT bench of Calcutta.
A May 15 order had allowed Jagatramka to try out a revival plan under the provisions of sections 230 to 232 of the Companies Act, 2013. The scheme would have been effective if all stakeholders had approved it with a three-fourth majority (75 per cent).
Four days prior to the meeting, JSPL, an unsecured creditor to Gujarat NRE having only 0.5 per cent of the total debt, moved the NCLAT and obtained the stay.
Gujarat NRE, the metallurgical coke producer, is under liquidation after creditors failed to approve a resolution plan under the Insolvency & Bankruptcy Code, 2016. The NCLT Calcutta order, if operationalised by all stakeholders by approving of it, would have been a first in the country.
"I'm disappointed that we did not get a chance to present our case before the tribunal. The revival effort will now be delayed by a few months. However, I'm confident of a positive outcome going forward," Jagatramka said over the weekend.
JSPL did not respond to an email despite repeated reminders.
The order is yet to be uploaded on the website of the NCLAT. Lawyers involved in the matter said notices have been issued to Jagatramka and the matter has been listed for hearing on August 6.
This is not the first instance when JSPL and Guj NRE Coke will be slugging it out in the court. The two were locked in a court battle over coking coal mines in Australia in the past. JSPL had acquired the mines the company used to own and operate in the Down Under five years back. But the two parties had fallen out thereafter.
The ghost of the past may continue to haunt the creditors as they will lose out Rs 10 lakh a day on the interest payment proposed by Jagatramka, assuming they had backed the plan.
The composite scheme of compromise and arrangement between Jagatramka and the creditors and shareholders of Gujarat NRE had called for a write down of the equity capital, fresh issue of ordinary equity shares and preference shares thereafter to secured, unsecured creditors and FCCB holders. It had also proposed paying off a Rs 500-crore loan of the secured creditors over 10 years with an 8.1 per cent interest by an equated yearly scheme.
Following implementation, the lenders' stake will go up to 38.83 per cent from 32.39 per cent, while the promoters' stake will fall from 25.61 per cent to 17.52 per cent.
Secured creditors, which had Rs 3,501.16 crore admitted claim, will get Rs 40 crore new shares of face value Re 1 and Rs 2,961 crore worth of preference shares redeemable by a bullet payment after 20 years.
The management said Guj NRE would be able to generate enough cash flow to service the debt as well as provide potential upside to the shareholders.
"There are three plants employing 1,200 employees. It will be a viable operation post restructuring," Jagatramka had said.
The promoter, in association with PricewaterhouseCoopers, had prepared a resolution plan under the IBC. But the amendment of November 23, 2017 barred the promoters from putting up a plan without paying the overdue amount. The company was sent to liquidation in January. Jagatramka has earned a stay from the appellate company law tribunal.
