18 July 2019: Lenders led by Bank of Baroda have decided to sign an inter-creditor agreement with Kohlberg Kravis Roberts & Co backed JBF Industries under a June 7 circular issued by the Reserve Bank of India, said two people familiar with the development.
Bank of Baroda had filed an insolvency resolution petition against the maker of polyester-based products at the Ahmedabad bench of the National Company Law Tribunal in September. However, the plea is yet to be admitted by the dedicated bankruptcy court. The tribunal posted the hearing for the case for August 27.
“Majority of the lenders signed the ICA last week. Though not all the lenders have signed, we expect that to happen,” said a banker privy to the case. “After everyone signs, we will get 180 days to chalk out a possible resolution plan.”
Sanjay Asher, the partner at law firm Crawford Bailey & Co who is advising JBF Industries, refused to divulge details since the matter is sub judice. A company spokesperson declined to comment.
Email queries to KKR and Bank of Baroda remained unanswered till the time of filing the story. The company’s standalone borrowings stood at Rs 1,623 crore as of March, while its liabilities were about Rs 1,000 crore.
According to the RBI circular, lenders must enter an ICA during the review of the borrower account within 30 days of the first default to any lender.
The new framework lays down parameters to be included in the ICA, including decision-making by lenders holding 75% by the value of total outstanding facilities and 60% by number, and protection of dissenting lenders.
KKR agreed to invest $150 million for 20% in JBF Industries and its overseas arm JBF Global Pte in July 2015. Subsequently, the company said in an exchange filing in August that KKR Jupiter Advisors, a unit of the PE’s credit arm, would acquire 100% of JBF Petrochemicals.