With the State Bank of India, the lead banker in the consortium of lenders moving the National Company Law Appellate Tribunal (NCLAT) on behalf of the committee of creditors seeking fresh bids for the bankrupt Videocon Industries, the appellate tribunal on Monday sought a reply from the successful bidder Twin Star Technologies. The matter will now come up for hearing on September 27.
Twin Star Technologies is owned by Volcan Investments, which is an arm of Vedanta Group.
The SBI plea on behalf the lenders is to direct the CoC to reconsider its earlier decision to accept a 95% collective haircut on the exposure.
The matter is a complex one as earlier the CoC and the NCLT have approved the bid of Twin Star and legal provisions do not permit going back on the approvals once given.
“Proceedings with the implementation of the resolution plan is not feasible since the same is not consistent with the observations made by the adjudicating authority (NCLT) and appellate tribunal and considering the totality of the fact emerging in the present case, the SBI petition said.
The SBI’s plea is basically in response to a petition filed by dissenting lender, Bank of Maharashtra, which has challenged the NCLT ruling in the NCLAT.
The NCLAT had on July 19 stayed Twin Star Technologies winning bid for Videocon Industries on an appeal filed by dissenting creditors, Bank of Maharashtra and IFCI. Both the lenders were unhappy with the value being realised through the resolution plan.
Prior to it, though the Mumbai bench of the National Company Law Tribunal had on June 8 approved the resolution plan of Twin Star Technologies, it had observed that the firm was “paying almost nothing” as the amount offered is only 4.15% of the total outstanding claim. It had noted that the haircut for all the creditors is 95.85% and suggested to both the committee of creditors and the successful applicant to increase the payout.
The NCLT had also asked the Insolvency and Bankruptcy Board of India to see whether confidentiality was maintained during the corporate insolvency resolution process as Twin Star’s bid was very close to the liquidation value, which was meant to be confidential.
