Mumbai: The National Company Appellate Tribunal Law (NCL) has remained the sale of the Videocon Company Group to Vedanta twin-star technology.
Bank of Maharashtra (BOM), which has a small portion of the loan amount, has appealed to orders where creditors to get around 4% of recognized claims of Rs 64,838 Crore.
The bomb has raised two main objections – the selling price is close to liquidation prices, and even 4% are paid mostly in the form of debt with a little cash in.
IFCI was also understood to have appealed separately to Videocon.
NCLT, agreed to a resolution plan on June 8, has asked a question with respect to sales, indicating that the applicant pays almost non-existence and questioning how the offer comes with liquidation value.
Lenders are expected to maintain maximum confidentiality about liquidation values.
This is the value below they will sell assets rather than selling companies to fisheries bidders below.
NCLT has filed doubts about the confidentiality clause that was followed in this case and asked for bankruptcy and the Council of Bankruptcy to examine this problem.
In terms of bankruptcy laws, the Creditors’ Decree is considered the highest and NCLT usually agreed to an agreement without entering the excess during the process if followed.
Usually, creditors that have not been lost because they get their part based on the value of liquidation rather than selling value.
In the current case, the liquidation value and selling value almost in par and bombs should have been in line with other creditors.
However, PSU lenders have violated the rankings of their colleagues because the resolution plan tries to pay for a different creditors with non-convertible (NCDS) debtings.
Advice for bombs argue that what the bank will receive will be less than the company’s liquidation value.
In terms of plans submitted by twin stars, from the 2,962 crore RS offered, only Rs 200 Crore will be paid in cash and the rest will be paid in the NCD.
Twin star has proposed to issue NCD with a nominal value of Rs 2,700 Crore.
NCDs will be exchanged in 5 installments – The first installment of Rs 200 Crore will be due 25 months forming the closing date of the transaction, the rest will be repaid with the installment of Rs 625 Crore in three, four, five, five, five and six years from the closing date.
An extraordinary NCD will bring a coupon paid 6.65% every year.
In its order, the Appellate Agency gave a two-week respondent to answer and had registered the appeal for ‘hearing receipts’ on September 7.
The company will continue to be managed by bankruptcy professionals.