A CODE FOR CREDITORS
ON JUNE 8 THIS YEAR, the Mumbai bench of the National Company Law Tribunal (NCLT) approved the resolution plan for Videocon Industries Limited. The consumer durables company and its 12 subsidiaries had defaulted on repayments of ₹64,838.63 crore. Of that amount, Videocon’s lenders had agreed to a resolution amount of ₹2,962.02 crore. That was a massive 95.85 per cent haircut—the dues banks are ready to forgo in case of settlement—on the admitted claims.
However, the NCLT bench—comprising Member (Judicial) H.P. Chaturvedi and Member (Technical) Ravikumar Duraisamy—made a very interesting comment while passing judgment. They questioned, in writing in their 47-page judgment, whether the Committee of Creditors (CoC) was taking a haircut or a “total shave”
The jibe was aimed at Videocon’s lenders, led by the State Bank of India (SBI) and including Bank of Maharashtra, IFCI, Morgan Securities, and SIDBI. After almost three years of insolvency proceedings, the CoC had settled on taking the massive 95.85 per cent haircut. The winning bid was from miner Vedanta Group’s fully owned subsidiary, Twin Star Technologies Limited.
The NCLT Bench observed that Twin Star was paying virtually nothing for Videocon’s assets. “… The
You’re reading a preview, subscribe to read more.
Start your free 30 days