The bankrupt Jyoti Structures might find a buyer and not go into liquidation as feared with the committee of creditors (CoC) having sought a grace period.
The bankrupt Jyoti Structures might find a buyer and not go into liquidation as feared with the committee of creditors (CoC) having sought a grace period. While 73% of lenders believed to have approved a resolution plan, the resolution professional (RP) has requested the National Company Law Tribunal (NCLT) for an extension since the 270-day deadline expired on March 31. Sources said there was a glitch in the e-voting mechanism on March 26 and 27, when the voting was scheduled. Moreover, they said one bank needed to get a final approval from its top management. Under the Insolvency and Bankruptcy Code (IBC), a company has to be liquidated if it fails to complete the insolvency resolution process within 270 days of its admission to the bankruptcy court. “The consent letter should be received any moment and that would take the approval to the necessary 75%,” said a banker familiar with the development. Meanwhile, the technical glitch has been sorted out. The IBC requires a three-fourths majority to approve any resolution plan. However, the Insolvency Law Committee is understood to have suggested lowering the voting threshold to 66% to promote speedy resolutions.
Jyoti Structures has received just one resolution plan from a consortium led by Sharad Sanghi, MD & CEO of Netmagic Solutions, and comprising Madhusudan Kela, formerly with Reliance Capital, and Manish Kejriwal, managing partner of Kedaara Capital, in his individual capacity. The Kolkata-based company makes cables for transmission lines, substations and distribution projects. In FY17, the company reported a net loss of Rs 1,483 crore on the back of Rs 857 crore in revenues. In a notice to the stock exchanges on March 27, Vandana Garg, the RP for Jyoti Structures, said that she had sought the approval of the CoC to the final resolution plan submitted by the resolution applicant and the resolution was rejected due to lack of requisite majority. “The Resolution Professional has received communication from few banks that on account of certain reason(s), they are revisiting and considering their decisions in respect of the resolutions put to vote. The Resolution Professional is awaiting a final word/communication from them in this regard,” the statement had said.