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Home / Business / Videocon CoC requests NCLAT to allow fresh bids for company

Videocon CoC requests NCLAT to allow fresh bids for company

In September, the lender had approached the tribunal for new proposals after they had come under criticism for accepting a bid that gave a huge haircut of almost 96%
Representational image.
Representational image.
File photo

Our Bureau   |   Mumbai   |   Published 19.11.21, 01:36 AM

The committee of creditors (CoC) of Videocon Industries on Thursday asked the National Company Law Appellate Tribunal (NCLAT) to allow fresh bids for the company.

In September, the lenders had approached the appellate tribunal for new proposals after they came under criticism for accepting a bid that led to recoveries of just 4 per cent of their dues, or a haircut of almost 96 per cent.

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At the hearing on Thursday, solicitor-general Tushar Mehta reportedly told the NCLAT that the commercial wisdom of the creditors panel under the bankruptcy code has full immunity from court interference.

A BloombergQuint report quoted him as saying that it is up to the CoC to check the feasibility of a resolution plan. If a plan is not viable, the committee can even reconsider its decision. He said maximising the value of the corporate debtor’s asset is an important feature of the Insolvency and Bankruptcy Code and that the lenders cannot escape this responsibility.

The lenders had approached the NCLAT after a division bench of the National Company Law Tribunal (NCLT) in June had approved the resolution plan proposed by Anil Agarwal-controlled Twin Star Technologies.

The plan was earlier approved by the creditors panel in December 2020.

Out of the total claim amount of Rs 71,433.75 crore by the various creditors in Videocon Industries, claims that were admitted stood at Rs 64,838.63 crore.

The resolution plan proposed a payment of Rs 2,962.02 crore, amounting to a total haircut of 95.85 per cent to the creditors.

However, this order was stayed by the appellate tribunal on July 19 following petitions filed by two dissatisfied creditors of the Videocon Group — Bank of Maharashtra and IFCI Ltd.

Subsequently, State Bank of India, the leading lender of Videocon Industries, approached the NCLAT urging that the insolvency process should be renewed.

It urged the tribunal to permit the resolution professional to seek fresh expression of interest of the 13 companies of the debt-ridden group.

SBI in its plea had cited the strong observations made by the NCLT against the winning bid by Twin Star. The lender on behalf of assenting creditors of Videocon, represented 94.98 per cent voting.



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