BS: Two-thirds of lenders have voted for Dhanuka Laboratories’ resolution

11 June 2019: More than two-thirds of the lenders of Chennai-based Orchid Pharma are believed to have voted in favour of the resolution plan of Gurugram-based Dhanuka Laboratories, leading its bid to reach the National Company Law Tribunal (NCLT) for further proceedings, sources said. The banks are expecting a haircut of 35-40 per cent.

The resolution plan of Dhanuka Laboratories, among the three bidders, was discussed by the Committee of Creditors (CoC) and it was later taken to the banks for further decision-making. The voting by the lenders started on June 7 and ended on Tuesday. A banker, close to the development, said the plan has been approved with 67.7 per cent votes. According to an earlier disclosure by the company, if 66 per cent of the CoC votes are in favour of the highest bidder, it will be submitted to the NCLT for approval.

However, the highest bid this time would see a larger haircut compared to the bid the previous successful bidder Ingen Capital has submitted for Rs 1,490 crore. 

The quote is less than Rs 1,000 crore this time and is below the liquidation value. Another banker, who has an exposure to the company, has said while the final voting figures would be known only on Wednesday, they are expecting a haircut of 35-40 per cent. 

It may be noted, the banks have already agreed for a haircut when US-based Ingen Capital’s bid was approved. A consortium of 24 banks has lent a total of Rs 3,200 crore to the drug maker, said company sources earlier. The resolution professional might submit the lenders’ vote on a prospective plan with the National Company Law Tribunal on June 13. Lenders include State Bank of India, Union Bank of India, Allahabad Bank, IDBI Bank, Indian Bank, Axis Bank, Canara Bank, Kotak Mahindra Bank, Indian Overseas Bank, City Union Bank among others.

Three pharmaceutical companies —Dhanuka Laboratories, Chennai-based Accord Life Spec and Hyderabad-based Covalent Laboratories — were in the fray in this second-time resolution process. Dhanuka Laboratories is a prominent manufacturer and exporter of Oral cephalosporin APIs.

Orchid Pharma is in its second attempt to find a resolution plan under the corporate insolvency resolution process, as the previous resolution plan by Ingen Capital was annulled by the NCLT.

The Business Standard reported

Categories: General News, India Bankruptcy

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