TOI: NCLT closes insolvency proceedings against Parsvnath Landmark

8 February 2019: The National Company Law Tribunal has closed the insolvency resolution process against a Parsvnath Developers’ subsidiary after homebuyers ‘amicably settled’ their dispute with the realty firm. 

Parsvnath Developers’ arm Parsvnath Landmark is constructing a housing project, comprising 500 units, at Civil Lines in the national capital. 

In its order dated January 11, the NCLT had allowed insolvency proceedings against Parsvnath Landmark after three home buyers approached the tribunal complaining about delay in completion of the project. 

However, a two-member bench of the NCLT stopped the insolvency proceeding in an order dated February 1, after the financial creditors of the company (homebuyers) informed about the settlement with Parsvnath Landmark. 

The three flat buyers along with the company filed their affidavits before the tribunal informing the decision. 

“As a sequel to the above discussion, the order dated January 11, 2019 initiating Corporate Insolvency Resolution Process against the Corporate Debtor is closed and naturally the order would not be given effect any further,” said the NCLT. 

The tribunal has also directed the interim resolution professional appointed for Parsvnath Landmark to not “conduct any proceedings”. 

It further said: “We hope and trust that the parties will abide by the terms of the settlement and avoid another petition with a prayer for triggering of Corporate Insolvency and Bankruptcy Process”. 

However, the IRP informed the tribunal that the committee of creditors has not yet been constituted. 

The IRP also said that 300 claims have been received against the company after a public notice was issued to invite the same. 

On this NCLT observed: “We find that this application is covered, however we constrained to observe that the 300 claims which have been received by the IRP may result in to a spat of the other petitions under Section 7 or 9 of the Code, 2016”. 

On January 11, passing an order, the NCLT had admitted an insolvency petition filed by three homebuyers against the subsidiary firm – Parsvnath Landmark Developers – for inordinate delay in the development of this project and non-refund of their payment. 

The tribunal had also appointed Yash Jeet Basrar as an interim resolution professional (IRP) to run the corporate insolvency resolution process of Parsvnath Landmark Developers. 

The tribunal direction had come over a petition filed by Alka Agarwal and two others, who had booked flat at La Tropicana project of Parsvnath Landmark Developers at Khyber Pass in Delhi for a consideration of Rs 10.93 crore. 

According to the flat buyer agreement executed between the parties on 1 October 2009, Parsvnath Landmark Developers was to hand over the possession within 36 months from the date of commencement of construction with grace period of six months. KRH MJH BAL.

The Times of India reported

ET: Tata Steel Q3 profit jumps 54% YoY to Rs 1,753 crore, misses Street estimates

8 February 2019: Tata Steel on Friday reported 54.31 per cent year-on-year (YoY) rise in profit at Rs 1,753 crore for December quarter, which fell short of Rs 2,289 crore net estimated by analysts in an ET Now poll.

The company had posted Rs 1,136 crore profit in the similar period last year.

Consolidated revenue for the quarter jumped 23 per cent YoY to Rs 41,220 crore, with India sales rising 41 per cent to Rs 22,063 crore, the company said in a regulatory filing.

Consolidated adjusted Ebitda rose 27 per cent to Rs 7,225 crore compared with Rs 5,671 crore in the corresponding quarter last year.

The liquidity position of the group remained robust at Rs 19,320 crore comprising of Rs 8,549 crore in cash and cash equivalents and Rs 10,771 crore in undrawn bank lines, the company added.

Commenting on the results, CEO & Managing Director TV Narendran said: “Despite a sharp drop in international steel prices, we were able to maintain our overall realisations and increase our volumes significantly in India.

The integration of Tata Steel BSL continues and our 5 MTPA expansion at Kalinganagar is also making good progress. We are also looking forward to enhancing our long products and downstream capability through the acquisition of the 1 mtpa steel business of Usha Martin.”

In line with our strategy of divesting non-core assets and focusing on India, we have announced a divestment of a 70% stake in our SEA business and we continue to work on exploring similar opportunities across our portfolio, he added.

Economic Times reported

ET: Adani may need to revisit plans for KSK Mahanadi

8 February 2019: Adani Group may have to revisit its plan to acquire the troubled KSK Mahandi Power Company as the state-owned Uttar Pradeshpower distribution company is considering committed cash payments to the company in exchange of a discount on price of power purchased. While the cash commitment can be a big boost to KSK Mahanadi, the discount on price of power could be a roadblock for the deal. 

The Gautam Adani-led group had emerged as the best bidder to acquire three stressed power projects, including KSK Mahanadi, out of the seven projects that were considered for resolution outside of the insolvency code.

But in a new development, UPPCL, which buys a third of the power generated from KSK Mahanadi is considering committed cash flow to the company which will help the latter meet its financial commitments, in lieu of a 32 paise per unit discount from February 1. The discount on power price could impact Adani’s acquisition plan and may need some recalculation of valuation, experts said. 

Emails sent to Adani Group and KSK remained unanswered.

UPPCL management had expressed concerns as low supplies from KSK Mahanadi, which runs a power plant in Chhattisgarh, had resulted into higher final power price. In response to this, the management of the beleaguered power company said that the short supply has led to high penalties for the unit which has translated into higher delivered cost.

The Economic Times reported

BS: Essar Steel insolvency case: Lenders to gain more, Arcelor tells NCLT

8 February 2019: Defending itself against Standard Chartered Bank from diluting its bid for Essar Steel, ArcelorMittal on Thursday told the National Company Law Tribunal’s Ahmedabad Bench that lenders would gain more from the deal.

The bank alleged that as against an upfront payment of Rs 42,000 crore, in addition to working capital adjustments of Rs 2,500 crore, the LN Mittal-led firm negotiated its bid downwards in collaboration with State Bank of India-led Committee of Creditors (CoC).

The bank said it has been discriminated in ArcelorMittal’s resolution plan, which both the firm and the CoC have refuted.

ArcelorMittal told the two-members NCLT Bench, comprising adjudicating authorities Harihar Prakash Chaturvedi and Manorama Kumari, contrary to the bank’s claims its resolution plan was openly negotiated by members of the CoC to include an upfront payment of Rs 39,500 crore as well as a guaranteed working capital adjustments worth Rs 2,500 crore.

The company said it was committed to passing on any additional working capital accrued with Essar Steel to lenders at the time of acquisition as valued by an independent auditor.

“Ordinarily a successor gets the working capital but what we did was to give away this working capital to lenders. Other than Rs 42000 crore, I also complied with Supreme Court (SC) ruling to settle dues worth Rs 7000 crore (in Uttam Galva and KSS Petron) as well as infusing Rs 8000 crore as equity,” ArcelorMittal’s legal counsel told the NCLT bench.

However, SCB’s counsel’s argued that the any such working capital were to be paid to lenders in any case. According to SCB, the request for proposal (RFP) invited for bids had anyway required for working capital adjustments to be stated over and above the upfront payment component. Further, citing a September 26, 2018 letter of CoC’s counsel to members, SCB told NCLT that the lenders’ committee had admitted that the upfront payment was Rs 42000 crore and not Rs 39500 crore as was being claimed by CoC.

Cross arguments between legal counsels of CoC and SCB also took place on Thursday over legality of the manner in which ArcelorMittal’s bid was approved and the equitable distribution of commercials in the plan or lack of it.

Citing the SC ruling in the recent Swiss Ribbons case where the apex court quoted United Nations Commission on International Trade Law (UNCITRAL) Guidelines, CoC told NCLT that equitable treatment must be ensured between lenders with “similar legal rights”.  However, in the Essar Steel case, SCB was not a lender with similar legal rights as unlike other CoC members who had direct charge or security of ESIL’s project assets, it had the latter’s pledged shares in one of its subsidiaries instead.

Business Standard reported

ET: Tata Motors Q3 hits China wall: Major takeaways

7 February 2019: Tata Motors dropped a shocker on Thursday when the auto major reported its biggest-ever quarterly loss for October-December.

Net loss came in at Rs 26,961 crore for the quarter compared with a net profit of Rs 1,214.60 crore in the year-ago period.
Bottom line was impacted by an exceptional item of asset impairment in JLR of Rs 27,838 crore.

Here are top takeaways from Tata Motors Q3 results.

Revenue: Consolidated revenue increased 5.79 per cent YoY to Rs 76,264.69 crore during the quarter under review. “Weak sales in China and de-stocking impacted JLR,” Tata Motors said in a release.

Ebitda: The figure declined 8.50 per cent YoY to Rs 6,522 crore. Ebitda margin slipped by 370 basis points to 0.1 per cent.

Updates on JLR: JLR reported net loss of 3,129 million euros in Q3 FY19 while revenue of the subsidiary declined 1.40 per cent to 6.20 billion euros. “One time exceptional non-cash charge taken for asset impairment read 3.1 billion euros. It reduces growth in depreciation and amortisation by 300 million euros per annum,” Tata Motors said in a release.

“Performance was impacted by challenging market conditions, particularly in China and inventory corrections. We continue to invest in exciting products and leading edge technologies. Taking decisive actions to make the business fit for future by stepping up competitiveness, reducing costs and improving cash flows,” it stated.

Management-take: “Tata Motors domestic business continues to see strong momentum and has delivered market share gains as well as profitable growth. The Turnaround 2.0 strategy is delivering well with a continuing portfolio of product launches, which are the requisite building blocks for sustainable growth,” said N Chandrasekaran, Chairman.

“In JLR, the market conditions continue to be challenging, particularly in China. The company has taken decisive steps to step up competitiveness, reduce the costs and improve cash flows while continuing to invest in exciting products and leading edge technologies. With these interventions, we are building Tata Motors group to deliver strong results in the medium term,” he added.

Total expenditure: Consolidated expenditure jumped to Rs 78,797.08 crore in Q3 FY19 over Rs 72,303.95 crore in the same period last year.

The Economic Times reported