The firm defaulted in repayment of loan and interest to the tune of over Rs 300 crore to banks and financial institutions.
The Kolkata bench of the National Company Law Tribunal (NCLT) on Tuesday ordered liquidation proceedings against Nicco Corporation after its lenders voted against the corporate resolution plans prepared by the company. According to sources, Kunal Banerjee, who had been appointed the resolution professional to work with the committee of creditors to come up with a corporate resolution plan for the revival of the company, proposed to start liquidation process as the committee rejected resolution plans prepared by the Kolkata-based firm.
On Tuesday, a division bench of the tribunal comprising Justices Vijai Pratap Singh and Jinan KR ordered liquidation proceedings for the cable manufacturer, the flagship company of the Nicco Group, under Section 14 of the Insolvency and Bankruptcy Code (IBC). The firm defaulted in repayment of loan and interest to the tune of over Rs 300 crore to banks and financial institutions, sources said. It had obtained credit facilities from a total of 12 consortium banks. In the last fiscal, it had reported a net loss of Rs 28.60 crore.
Nicco Corporation had moved an application under IBC Section 10, which was admitted by the Kolkata bench of NCLT on May 2. Due to the continuous losses in business, the net worth of the company got completely eroded as per the audited accounts of the company as on March 31, 2011, on the back of very high losses suffered in the years 2008-09 and 2009-10.