The Mumbai bench of the National Company Law Tribunal (NCLT) reserved its judgment on JSW Steel-Aion Investment’s resolution plan for Monnet Ispat after legal counsels for the company’s operational creditors filed a plea saying that they have not been notified about details of the plan. “It is the larger responsibility of the committee of creditors (CoC) to keep us informed. However, I have not been informed. The Insolvency and Bankruptcy Code (IBC) says there must be a balance in paying the dues of the financial creditors and operational creditors,” the legal counsel for one of the operational creditors said.
Monnet Ispat owes around Rs 440 crore to its operational creditors, while dues to the secured financial creditors are around Rs 9,000 crore. Lenders are expected to receive around Rs 2,750 crore once the resolution plan is approved. The total value of the resolution plan is around Rs 3,750 crore, which includes some investment in Monnet Ispat’s plant. Last week, the tribunal had asked the counsels for Monnet Ispat’s resolution professional (RP) and the bidder to submit written submissions on the resolution plan.
In April, the bench had asked for clarity on the method followed for arriving at the liquidation value, payment of dues to unsecured financial creditors who have dissented, regulatory approvals required and the inclusion of certain assets of Monnet Ispat in the resolution plan, especially the Gare Palma coal mine, the licence of which was cancelled by the government. The CoC, led by SBI, had approved the plan by a 98.97% vote. Some of the other lenders in the CoC include PNB, ICICI Bank and Axis Bank. The insolvency process for Monnet Ispat began on July 18, 2017, and Sumit Binani was appointed as the RP.