First Resolution Plan under Insolvency and Bankruptcy Code approved after the IBC Ordinance

15 Dec 2017 | Source: IBC Orders

Honble National Company Law Tribunal, Allahabad Bench stamped the first Resolution Plan after the Insolvency and Bankruptcy Ammendments (Ordinance) 2017.

An Insolvency proceeding has itself initiated by JEKPL Private Limited [Formerly known as Jubilant Energy (Kharsang) Private Limited] under section 10 of the Insolvency and Bankruptcy Code, 2016. The Honble NCLT Allahabad bench passed an order to initiate the Corporate Insolvency Resolution Process on March 17, 2017 and appointed Interim Resolution Professional, Mr. Dinkar.

Later on, Committee of Creditors (CoC) decided to change the Interim Resolution Professional and based on the recommendation of CoC, Mr. Mukesh Mohan was appointed as Resolution Professional by Honble NCLT, Allahabad.

The members of the CoC of JEKPL Private Limited are Central Bank of India, State Bank of India and Axis Bank, which lends approximately Rs. 599 crores.

Several round of discussions were held with the Resolution Applicants and finally CoC approved the Resolution Plan submitted by Private equity firm Atyant Capital, with more than 80% voting rights.

The resolution plan is for a full takeover of the existing shareholding and management of the company. According to this Resolution plan, banks may have to take a haircut of 70-75%.

The National Company Law Tribunal, Allahabad said in its judgment that "this court being an adjudicating authority is not expected to substitute its view with commercial wisdom of resolution professional (RP) and committee of creditors (COC) nor should it deal with technical complexity and merits of resolution plan unless it is found contrary to the express provisions of law and goes against public interest."