Kotak Mahindra Bank on Friday raised the issue of financial creditors suffering due to the huge haircut proposed in the resolution plan submitted by the Reliance Industries-JM Financial ARC combine for Alok Industries at the National Company Law Tribunal’s (NCLT) Ahmedabad bench. The tribunal will hear all the cases related to Alok Industries on September 6 and 7.
Alok Industries owes its lenders Rs 29,614 crore and the Reliance Industries-JM Financial ARC combine had offered Rs 5,050 crore for the company, which translates into an 83% haircut for the lenders, the legal counsel for Kotak Mahindra Bank said. While the resolution professional for Alok Industries, Ajay Joshi, has filed an application for the approval of the resolution plan, Kotak Mahindra Bank has filed an intervention application against it.
Kotak Mahindra Bank’s legal counsel argued that as per the resolution plan, the financial creditors will receive only 18% of their total debt to the company. The bank has lent about Rs 170 crore to Alok Industries and it is likely to recover only Rs 20-22 crore if the plan is approved.
During the hearing, all parties urged the bench to take up the matter on an urgent basis since the committee of creditors is incurring a huge cost amounting to Rs 1.5 crore daily.