4 June 2019: The National Company Law Appellate Tribunal has approved the resolution plan of Maruti Ferrous for the acquisition of bankrupt Sunil Ispat and Power.
With this, a factory that’s been shut for seven years is set to open for production. Lenders will recover half of the principal amount they had lent to Kolkata-based Sunil Ispat and Power. Total outstanding claims were at about Rs 36 crore.
The entities seeking to recover the loans are Hudco, Asset Reconstruction Company (India), Syndicate Bank, Bank of Baroda and Central Bank of India.
An estimated 200 people can be employed in the company’s factory located in Raigarh. Kolkata-based Arun Gupta was the resolution professional in the insolvency case.
Maruti Ferrous emerged as the successful resolution applicant about four months ago. The Kolkata Chapter of the National Company Law Tribunal, too, had approved its proposal.
“The proposed modified distribution of the ‘Resolution Plan’ is in accordance with law and the same treatment has been given to the ‘Financial Creditors,” NCLAT said in the order, which ET has reviewed. The appellant is to make the payment within one month from the date of the order of this appellate tribunal, the court said.
The court had said that operational creditors must be paid in full along with other financial creditors.
Maruti Ferrous submitted a ‘modified’ resolution plan to include the operational creditors, who had neither supplied goods nor provided any services. The apex dedicated court in insolvency cases finally approved it.
“This case is all about employment as Sunil Ispat’s Raipur facility would now be operational and create job opportunities for up to 200 people,” said Gupta, the resolution professional.
If only the principal amount loaned is considered, the lenders will have to forgo half of the amount. The lenders lose more when the interest portion is included, Gupta said.