ET: Patanjali moves NCLT for considering Ruchi Soya offer

31 January 2019:  Patanjali Ayurveda has moved the National Company Law Tribunal (NCLT) with a plea to direct lenders of stressed Ruchi Soya to consider its offer since Adani Wilmar has expressed in writing its wish to withdraw its offer citing “delays” in the resolution process.

Patanjali filed its plea on January 23 in the Mumbai bench of the insolvency tribunal and the next hearing for the matter is slated for February 7.

“We have filed an application with the NCLT for it to direct the Ruchi Soya lenders to consider our offer,” a Patanjali Ayurveda spokesperson told ET, but did not disclose other details saying the matter is sub judice.

Adani Wilmar, the preferred bidder for the asset, had in December written a letter to the resolution professional (RP) and lenders of Ruchi Soya withdrawing its Rs 5,474-crore offer as a delay in closing the process was causing “deterioration of the asset”. It said the delay was “detrimental to the interest of the stakeholders”. The plan was voted by 96% lenders as the preferred one in August but has not been approved by the NCLT.

Following this, Patanjali also expressed its interest to RP Shailendra Ajmera and the lenders and said it was ready to match Adani’s offer given a chance.

Adani Wilmar, a joint venture between infrastructure major Adani Group and Singapore’s Wilmar International, was voted by the committee of creditors (CoC) as the winning bidder for India’s largest bankrupt edible oil maker that owes Rs 9,405 crore to lenders and Rs 1,248 crore to operational creditors in August.

Out of Adani Wilmar’s offer of Rs 5,474 crore, Rs 4,300 crore was to be paid to lenders. Yoga guru Baba Ramdev’s Patanjali Ayurveda upped the offer to Rs 5,765 crore, but set aside a smaller Rs 4,065 crore for the lenders.

Economic Times reported

BS: NCLT admits insolvency plea against Emaar MGF Land, appoints resolution professional

31 January 2019:The National Company Law Tribunal (NCLT) has asked to initiate proceedings against firm after two filed petition against the company for a huge delay in delivery of their housing units.

Admitting the pleas of two of its home buyers, a two member bench headed by NCLT Justice M M Kumar has appointed one as the interim resolution professional of the company and directed him to make a public announcement about the development.

The tribunal has also directed the company, its erstwhile director, or any other person associated with the to extend every assistance and cooperation to the interim resolution professional”.

The NCLT order came on the plea of two and — who had purchased flats at its Palm Greens, KherkiDaula, Gurgaon project.

The firm failed to deliver the project within 36 months to June 2015.

Later, the builder also failed to refund the amount along with the interest. Thereafter, the petitioners approached the NCLT.

Consenting to them, NCLT said The applicant financial creditor has disbursed the the respondent corporate debtor (Emaar MGF Land) as a consideration for purchase of the residential flat. Though a considerable long time has lapsed, even the principal amount disbursed has not been repaid by the respondent corporate debtor as per the provisions of the flat buyer’s agreement.” 

It further said: “It is accordingly held that respondent corporate debtor has committed default in repayment of the outstanding financial debt accordingly, the present application is admitted.” 

In 2005, Dubai-based entered Indian market in partnership with India’s and invested ? 8,500 crore through joint venture 

However, in April 2016, it decided to end their 11-year old JV.

In January 2018, the (NCLT) approved the proposed demerger scheme of Emaar MGF Land, paving the way for two JV partners to go separate ways. The demerger process got completed by July last year.

Business Standard reported

LM: Tri-County’s ₹67 cr resolution plan for BSR gets NCLT nod

31 January 2019: The National Company Law Tribunal (NCLT) has approved the resolution plan submitted by the US-based Tri-County Premier Hearing Services Inc. to acquire debt-ridden Bhilai Scan and Research Pvt. Ltd (BSR) Diagnostics Ltd.

On 22 January, a Mumbai bench of NCLT presided over by justices V.P. Singh and Ravikumar Duraiswami approved the American company’s ₹67-crore resolution plan for the Chhattisgarh-based diagnostics chain.

“The resolution plan provides that within 30 business days of the effective date, the company shall appoint a monitoring agency constituting of two representatives of the secured financial creditors, one of resolution applicant (successful bidder) and one of resolution professional (RP) to monitor and supervise the implementation of the resolution plan,” the order said.

The monitoring agency must have representatives each from Axis Bank, State Bank of India and the RP.

BSR Diagnostics owes around ₹170 crore to financial and operational creditors.

The committee of creditors (CoC), which includes State Bank of India and Axis Bank, had approved the resolution plan with 99% voting in favour. The lenders agreed to a 58% haircut while approving the plan on 5 November.

The resolution professional for BSR—Sundaresh Bhat of BDO—confirmed the development.

“BSR will be Tri-County Premier Hearing Services’ first acquisition in India and will allow it to enter into radiology diagnostics as well,” Bhat said.

BSR operates about 19 diagnostic centres in central and eastern India, in cities such as Bhilai, Raipur, Nagpur, Jagdalpur and Cuttack.

Florida-based Tri-County’s plan involves paying around ₹67 crore to lenders and infusing fresh equity into the company. The debt-laden company also owns two hospitals: Apollo BSR Hospitals and BSR Cancer Hospital in Bhilai.

The RP received expressions of interest (EoI) from six entities, of which three filed their resolution plans. However, the CoC approved only one resolution plan of Tri-County Premier Hearing Services Inc.

Hyderabad-based advisory firm Medium Healthcare Consulting Pvt. Ltd will carry out the business of the BSR Diagnostics, under an agreement between Tri-County and Medium.

Tri-County has also formed a strategic tie-up with Odisha-based diagnostic chain Geeta Diagnostics Centre, which has agreed to infuse an additional ₹9 crore in lieu of 20% equity stake in BSR’s Odisha operations.

According to the court order, law firm Link Legal India Law Services is advising the RP in the case, while company’s promoters Rohit Khanduja and M.K. Khanduja are being represented by Ashish Pyasi, an advocate with Dhir & Dhir Associates.

Livemint reported

ET: BoB posts 4-fold rise in Q3 net on loan growth

30 January 2019: Bank of Baroda’s net profit quadrupled in the third quarter ended December 2018 compared to a year ago due to strong growth in retail loans and an improvement in asset quality. The net profit stood at Rs 471 crore during the quarter, up from Rs 111 crore in the year-ago period.

Domestic advances grew by 21 per cent to Rs 3.5 lakh crore from Rs 2.9 lakh crore in previous year quarter led by 32.5 per cent growth in retail loans.

The bank has set aside Rs 3,416 crore as provisions for non-performing assets (NPAs) up 8 per cent from the year-ago period.

However, this included Rs 919 crore of excess provisions which managing director P Jayakumar said was to deal with uncertainties with regards to existing standard loan exposures.

“We think there are some prevailing uncertainties with respect to the telecom sector and have set aside Rs 919 crore as precautionary cover for future uncertainty in the asset,” Jayakumar said.

Despite the increase in provisions credit costs decreased to 2.92 per cent of the loan book from 3.04 per cent a year earlier. The bank expects to recover Rs 1,200 crore from NCLT resolutions in the final quarter of the year. “We expect one or two accounts including Bhushan Power and Steel to be resolved by the next quarter. The latest Supreme Court verdict upholding the insolvency code is a positive and we believe that it will help fast track these cases,” Jayakumar said.

The bank’s provision coverage ratio for exposure to the 40 companies listed in the first and second list of the NCLT cases came at 72.6 per cent and 76.1 per cent respectively.

Total fresh slippages during the quarter stood at Rs 2,933 crore mainly on account of Rs 1,169 crore exposure in debt-laden IL&FS.

Gross NPA stood at Rs 53,184 crore, or 11.01 per cent to the total advances, down from 11.78 per cent in year-ago period. The net NPA ratio also declined marginally to 4.26 per cent of total advances from 4.86 per cent.

The Economic Times reported

BS: NCLT holds back approval of DCHL resolution plan to resolve IDBI grievance

29 January 2019: The Hyderabad bench of the (NCLT) has kept the approval of Deccan Chronicle Holding Limited (DCHL)’s resolution plan pending while asking the resolution applicant on Tuesday to respond to the objections raised by IDBI Bank, which claims it has got a raw deal in the plan.

The committee of creditors (CoC) of had recently endorsed the resolution plan, submitted by Srei Multiple Asset Investment Trust, with 82 per cent vote in its favour. The plan was placed before the bench for approval on January 25 by the resolution professional (RP), Mamata Binani.
An interim application filed by IDBI, which voted against the plan, along with the RP’s application seeking its approval, came up for hearing on Tuesday.
Explaining the grievances of his client, IDBI counsel informed the bench that the resolution plan was discriminatory as the resolution applicant did not offer a fair share to IDBI in the financial proposals. Ratakonda Murali, member (Judicial), then directed the resolution applicant to file a response to the issues raised by the IDBI counsel, pending the approval of the resolution plan.  The bench has posted the matter for hearing to February 19.
The process of resolution took several twists and turns ever since the admitted Canara Bank’s application seeking corporate proceedings against the Hyderabad-based media house in July 2017. One such twist came in July 2018, when the National Company Law Appellate Tribunal (NCLAT) had extended the resolution period by seven months, while asking the adjudicating authority to include  Kolkata-based Srei Infra in the CoC. 
Srei Multiple Investment Trust had to submit a revised resolution plan after the CoC rejected the initial plan.

Business Standard reported

ET: NCLT rejects Essar Steel promoter Ruias’ settlement bid

29 January 2019: The National Company Law Tribunal(NCLT) Tuesday rejected the debt settlement proposal put forth by the shareholders of Essar Steel saying the offer violates Section 12A of the Insolvency and Bankruptcy Code.

The Essar group hinted at challenging the verdict, citing the last week’s Supreme Court order that upheld the August 2018 amendment to the IBC law by adding Section 12A which allows creditors to take the company out of insolvency proceedings and allows out-of-court settlement with an upfront payment of the dues.

If it is not challenged again, th is opens the first major victory for the LM Mittal-run ArcelorMittal, which is the world’s largest steel maker, to the country which is one the fastest growing markets for the alloy. His earlier attempts through joint ventures-Uttam Galwa and KS Petron ended up as failures.

The Ahmedabad bench comprising adjudicating authority Manorama Kumari and Harihar Prakash Chaturvedi said the Rs 54,389-crore bid by Essar Steel Asia Holding, which is much higher than the winning bid by ArcelorMittal’s Rs 42,000 crore, is not maintainable as the only way to make a proposal is through Section 12A.

ArcelorMittal termed the verdict as “a positive development for both Essar Steel India and the country more broadly as the ruling protects the integrity of the IBC and ensures its legitimacy as a rules-based law. We now hope for a swift resolution to the case.”

However, hinting at challenging the verdict, an Essar group statement maintained that it still continues to believe that its bid is the most compelling one, wherein no lender/creditor loses even a penny.

“We continue to believe our offer of Rs 54,389 crore is the most compelling proposal available to Essar Steel creditors. Our offer to repay all classes of creditors and fulfills the IBC’s overriding objective of value maximisation that is established time and again by courts at all levels.

“We submitted the proposal under Section 12A and the recent SC judgement has established that the section’s provisions are applicable retrospectively,” it said.

“We will take a call on our next steps after going through the full order,” the company said.

The NCALT earlier this month had given a deadline to the Ahamedabad bench to clear the case before January 31.

The 10-million tonne per annum Essar Steel is one of the newest steel mill in the country and was the crown jewel for the Ruias after its sold the flagship 20-mmillion tonne Essar Refinery last year to the Russians.

Essar Steel is one of the biggest 12 accounts that the RBI had in June 2018 referred to the NCLT. The original promoters owed more than Rs 49,000 crore to a clutch of lenders led by SBI.

Bidding through Essar Steel Asia Holding, which owns 77 percent in the crippled steel mill, was the second attempt by the Ruia brothers to wrest control of the company after their failed bid to do so with Numetal, a Mauritius based shell company promoted by Revant Ruia and others like the VTB Bank of Russia.

On the contention of Essar Steel Asia Holding that they have the Constitutional “right to own property”, the bench made it clear that IBC overrides the said constitutional provision.

The bench also pointed out that the Supreme Court last week had upheld the Constitutional validity of the Section 12A of the IBC. It further said it does not find any illegality in the committee of creditors’ decision to accept ArcelorMittal’s bid which though is lower than the Ruias’ bid.

The bench further observed that the present plea by Essar Steel Asia Holding, which is opposed by both the lenders and ArcelorMittal, is not made as per the provisions of the 12A, and this not maintainable.

The bench will from Wednesday proceed with the resolution plan application filed by the resolution professional, it added.

Earlier, the resolution professional had submitted a proposal to pay Rs 54,389 crore to the committee of creditors, led by the State Bank. As per resolution plan submitted by ArcelorMittal, it would pay Rs 42,000 crore to the secured lenders, while an additional Rs 8,000 crore will be kept aside for capital.

In the past hearings, lenders as well as the Lakshmi Mittal-led ArcelorMittal had opposed the debt settlement proposal made by Essar Steel Asia Holding, claiming that it is against the Supreme Court order as well as the IBC provisions.

The same stand was taken by the resolution professional today, saying it is “too late” for Essar Steel Asia Holding, which holds 72 percent shares in the Essar Steel.

The Economic Times reported

BS: Jet Airways seeks shareholders’ nod to turn debt into equity, EGM on Feb 21

29 January 2019: Jet Airways is seeking shareholders’ nod to convert its debt into equity, appoint bank nominees on the board and increase the authorised share capital of the company to enable the issue of fresh preference shares. An extraordinary general meeting (EGM) of shareholders has been called on February 21 to seek approval for these proposals. 

The move comes as the airline’s founder-chairman Naresh Goyal is negotiating a debt restructuring and fundraising plan. Sources said a proposal to bring down Goyal’s stake to less than 20 per cent from 51 per cent was being discussed. 
Enhancing authorised share capital, which the EGM would take up, would allow Jet to issue fresh shares and convert loans into equity. At present, the airline’s authorised share capital is Rs 200 crore, while its paid-up equity capital (excluding share premium) is Rs 113 crore.  
The airline has proposed to raise authorised share capital to Rs 2,200 crore. This would comprise Rs 680 crore of equity capital and Rs 1,520 crore of preference share capital. “The airline could be looking at multiple fundraising instruments and one way could be issuing redeemable preference shares in lieu of external commercial borrowings,” said an industry expert.
Besides appointment of bank’s nominees as directors or observers on the board, shareholders will also need to approve modifications to the company’s articles of association and memorandum of association. Jet has a debt of over Rs 8,200 crore and a consortium of banks led by State Bank of India is working on a resolution plan after it defaulted on its principal and interest payments for the December-end quarter. The resolution plan is likely to be finalised early February. 
Recently, Jet had said it was working on a comprehensive resolution plan, including options on the debt-equity mix, equity infusion by various stakeholders and consequent change in the composition of the board. It said the resolution plan was under discussion among stakeholders and proposals were yet to be crystalised. 
According to a revised plan, Goyal’s stake in the airline could go down to 16-18 per cent, while Etihad Airways’ shareholding may rise from 24 per cent to around 40 per cent. Lenders would hold around 30 per cent, while the remainder will remain with the public. Etihad has sought a waiver from an open offer and relaxation of preferential pricing norms. The Securities & Exchange Board of India (Sebi) will take a decision on the matter soon, it is learnt.  
The Abu Dhabi airline has also appointed Alvarez & Marsal to do due diligence on Jet. Etihad has indicated that it would complete the formal due diligence by February 15 and has agreed to support the release of $35 million from Jet’s loyalty programme to the airline as an interim financing measure.  
Business Standard reported

ET: Bank of India Q3 net loss widens to Rs 4,738 crore; NPA provisions jump 2-fold

28 January 2019: State-owned Bank of India Monday reported widening of its net loss to Rs 4,737.56 crore in the third quarter ended December 2018, hit by nearly two-fold jump in provisioning for bad loans.

Its net loss was Rs 2,341.20 crore in the October-December period of 2017-18.

Total income of the bank, however, rose to Rs 11,839.53 crore during the reported quarter of 2018-19, as against Rs 10,376.03 crore in the same period a year ago.

Bank’s provisions for bad loans soared to Rs 9,179.48 crore in the December quarter, up from Rs 4,373.06 crore in the same period previous year.

Although, the bank improved on its asset quality with the net non-performing assets (NPAs) trimming down to 5.87 per cent of the net advances as on December 31, 2018, as against 10.29 per cent by the end of December 2017.

Gross NPAs (or bad loans) were down slightly at 16.31 per cent of the gross advances from 16.93 per cent a year ago.

In absolute terms, the gross NPAs of the bank stood at Rs 60,797.55 crore at end-December 2018 from Rs 64,248.58 crore a year ago period. Net NPAs were valued at Rs 19,437.35 crore as against Rs 36,117.23 crore.

During the quarter ended December 2018, the bank has made additional provision of Rs 5,098.74 crore in view of uncertainty of recovery and deterioration in value of underlying assets in respect of 331 NPA accounts, it said.

“In respect of RBI referred NCLT accounts (list 1 & 2), the bank has made a provision of Rs 572 crore during the quarter ended December 31, 2018, due to uncertainty of recovery. The provision held in respect of NCLT accounts stood at Rs 6,939.02 crore as on December 31, 2018, representing 100 per cent of the outstanding value,” it added.

Bank of India said there was a recovery of Rs 2,360.79 crore (including Rs 561 crore received in Bhushan Power and Steel Ltd) with respect to accounts referred to the National Company Law Tribunal (NCLT) as per the list 1 of the Reserve Bank.

“Resolution of NCLT accounts to lead to lower gross NPAs,” it said further.

Stock of the bank slumped 3.97 per cent at the close of business on BSE at Rs 90.60.

The Economic Times reported

HBL: JSW-Vardhman bid: Insolvency plans in limbo even after NCLT approval

29 January 2019: The resolution plan approved by the National Company Law Tribunal in December has an insertion stating that the lenders will have claim on ₹50 crore receivable of Vardhman in addition to the bid amount paid by JSW Steel.

Similarly, the approved plan has left it to the Income Tax department to waive off the ₹8-crore claim on the company.

Objecting to both the insertions, JSW Steel has already withdrawn its nominee from Vardhman board.

JSW Steel had agreed to pay ₹62.5 crore to the financial lenders and ₹1 crore for operational creditor. It has also agreed to infuse ₹63.5 crore as equity or debt in the stressed company.

The additional ₹50 crore, which the company has to receive from its vendors/suppliers, would have accrued to JSW Steel had the new clause was not inserted.

Both the demands in Vardhman case are contrary to other NCLT cases where the tax liability is extinguished as on the date of reference.

Seshagiri Rao, Joint Managing Director, JSW Steel, said the company is waiting for NCLT’s direction on operational guidance and the deal is subject to clarification on the contentious issues.

In the erstwhile BIFR era, he added, all the tax liability was extinguished on the date of approval.

The Hindu BusinessLine reported