With the ordinance amending the Insolvency and Bankruptcy Code (IBC), and thus making promoters of Gujarat NRE Coke (GNCL) ineligible to bid for the company, the resolution professional (RP) appointed for its corporate insolvency resolution process has invited a fresh expression of interest (EoI) from investors for the purpose of submission of resolution plans.
With the ordinance amending the Insolvency and Bankruptcy Code (IBC), and thus making promoters of Gujarat NRE Coke (GNCL) ineligible to bid for the company, the resolution professional (RP) appointed for its corporate insolvency resolution process has invited a fresh expression of interest (EoI) from investors for the purpose of submission of resolution plans. Following this development, four companies have so far expressed interest in submitting the resolution plans for the debt-stricken company. Earlier, when the RP, Sumit Binani, had called for the EoI, no other applicant, apart from its promoters, submitted a resolution plan for GNCL, the flagship company of Gujarat NRE group. But, as the company’s loans have remained non-performing for over a year, its promoters have become ineligible under the revised IBC guidelines.
The company owes lenders around Rs 4,600 crore and reported a net loss of Rs 676 crore on revenues of Rs 541 crore in the previous fiscal. In April, the Kolkata bench of the National Company Law Tribunal (NCLT) had admitted the application by the city-based metallurgical coke producer under Section 10 of the IBC. Notably, the moratorium of nine months for the company will expire on January 1, 2018. Appearing before a division bench of the tribunal, comprising justices VP Singh and KR Jinan, Sumit Binani’s counsel Kanishk Khetan on Thursday said, “The resolution professional has again called for an expression of interest, and certain candidates have expressed their interest in submitting the resolution plans.”
In his submission, Khetan did not give details of the firms, which have expressed interests. “Four firms have expressed interests in submitting the resolution plans. In the next meeting of the committee of creditors, this issue is likely to be discussed,” informed sources told FE. Binani was not available for a comment. The CoC of Gujarat NRE Coke is scheduled to meet on December 18. The RP is likely to submit the minutes of the meeting to the tribunal on December 20. The amendments to the IBC 2016 through a recent ordinance has put safeguards in place by prohibiting ‘wilful defaulters’ from regaining control of the defaulting company or stressed assets through the backdoor in the garb of a ‘resolution applicant.’
The ordinance has also prohibited promoters of companies, which have been non-performing for one year or more, from bidding during the resolution process. On Thursday, the scrip closed down 1.27% at `1.55 on the BSE.