The National Company Law Appellate Tribunal (NCLAT) on Thursday asked the preferred bidder for Jyoti Structures, a consortium led by Sharad Sanghi, MD and CEO of Netmagic Solutions, to modify its resolution plan for the debt-ridden company.
The National Company Law Appellate Tribunal (NCLAT) on Thursday asked the preferred bidder for Jyoti Structures, a consortium led by Sharad Sanghi, MD and CEO of Netmagic Solutions, to modify its resolution plan for the debt-ridden company. The two-member NCLAT Bench, led by chairman Justice SJ Mukhopadhyay, observed that the applicant should reduce the repayment period to five years from the proposed 15 years and make a bigger upfront payment. “Cut down the repayment period; make everybody equal. Let there be win-win position for all. We do not want liquidation, but if someone forces us then we’ll have to go for it,” the Bench said.
This followed a hearing on a plea by DBS, which urged the appellate tribunal to direct a liquidation of the company. DBS Bank has a share of 0.73% of the total secured debt of Jyoti Structures. The company was admitted on July 4, 2017 by the National Company Law Tribunal (NCLT) for initiation of the corporate insolvency resolution process (CIRP).
Sanghi, the sole resolution applicant for the company, has offered Rs 3,674 crore to financial creditors to be paid over a period of 15 years. While financial creditors of the company claimed Rs 8,226 crore, the resolution professional admitted claims worth Rs 7,364 crore. State Bank of India is the largest lender to the company with an exposure of Rs 1,875 crore.
The appellate tribunal directed the applicant to submit a revised plan before the next scheduled hearing on December 18. It also asked Sanghi to submit details of repayment.
Mumbai-based Jyoti Structures provides engineering, procurement and construction (EPC) services in the power transmission sector. It is one of 12 stressed companies identified by the Reserve Bank of India for insolvency proceedings in June last year. On August 20, 2018, the NCLAT ordered the Mumbai bench of the National Company Law Tribunal (NCLT) not to pass any order for liquidation of Jyoti Structures. It also asked the resolution professional not to sell any movable or immovable property of the company. Though the NCLT Mumbai did not order liquidation of Jyoti Structures, it had rejected Sanghi’s application through an order pronounced on July 25. The 270-day period for the resolution process for Jyoti Structures came to an end on March 31, 2018.