9 March 2019: Lenders have agreed to a one-time settlement offer made by the controversial promoters of Sterling Biotech, who have defaulted on bank dues worth Rs 15,000 crore. The promoters, bankers said, have made an offer that entails a haircut of close to 65 per cent for the lenders.
In a statement to the stock exchanges, the company said, “The committee of creditors has approved the withdrawal of the Corporate Insolvency Resolution Process of the company with requisite majority.”
Lenders had rejected a resolution plan by ACG Associated Capsules Pvt Ltd and also another on liquidation, the company had said on Wednesday.
While going in for resolution, the Indian lenders have the option either to recover, rectify or restructure the account.
In this case there is no issue of restructuring and is a case of recovery by way of sale of assets or settlement, said a banker. Almost 90 per cent of the lenders have agreed to the OTS.
Lenders decided to withdraw the account from the National Company Law Tribunal after it was referred for debt resolution under the Insolvency and Bankruptcy Code (IBC), 2016 in June last year.
According to the annual report for March 2018, signed by its resolution professional (RP) in December 2018, the financial creditors have made claims worth Rs 14,939 crore against the company. Of this, the RP has admitted claims worth Rs 8,967 crore as on November 21, 2018. As on March 31, 2018, reported loans, borrowings and external commercial borrowings stood at Rs 7,564 crore.
The application for settlement was made under section 12A of IBC that gives an opportunity to promoters to make an offer for the firm if binding bids have not been submitted subject to 90 per cent of the lenders agreeing.
In its annual report, the company said that it was under investigation by the Enforcement Directorate (ED) which undertook a search and seizure operation at its Mumbai and Vadodara office in August 2017. The company is also under investigation by the Central Bureau of Investigation and the Serious Fraud Investigation Office. On May 29, 2018, the ED has attached the properties of the company. The promoters of the company are based overseas.
Interestingly, on February 14 this year, the promoters of Sterling Biotech — Chetan, Chetan’s wife and Nitin Sandesara as well as Hiteshkumar Patel moved a Delhi court seeking cancellation of open-ended non-bailable warrants issued against them, PTI reported. The matter will be heard on April 2.
The charge sheet, filed under the various provisions of Prevention of Money Laundering Act, accused the company of taking loans from a consortium of banks led by Andhra Bank, which had turned into non-performing assets. It said the accused manipulated figures in the balance sheets of their flagship companies and induced banks to sanction higher loans.
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