CNBCtv18: NCLT Ahmedabad clears JM Financial-RIL’s offer for Alok Industries with riders

8 March 2019: The Ahmedabad bench of National Company Law Tribunal (NCLT) on Friday cleared Rs 5,050 crore joint bid by Reliance Industries Ltd (RIL) and JM Financial Asset Reconstruction Company to acquire the debt-ridden textile manufacturer Alok Industries.

In July 2017, the Ahmedabad bench of the NCLT had admitted insolvency proceedings against the textile company under the Insolvency and Bankruptcy Code.

Earlier, the Committee of Creditors (CoC) had twice rejected the RIL-JM Financial bid for Alok Industries.

The consortium of lenders, led by SBI, is claiming dues of over Rs 23,000 crore from Alok Industries.

This is a developing story. Check back later for more details.

CNBC TV18 reported

N18: NCLT Allows ICICI Bank’s Insolvency Plea Against Punj Lloyd Over Rs 854 Crore Default

8 March 2019: In a setback to engineering and construction firm Punj Lloyd, the National Company Law Tribunal (NCLT) has admitted an insolvency plea against the company filed by ICICI Bank.

A two-member Principal Bench headed by President Justice M M Kumar has admitted the lender’s plea to initiate insolvency proceedings against Punj Lloyd for a default of Rs 853.83 crore.

Confirming the development, Punj Lloyd said in a regulatory filing that the company was waiting for the copy of the full order to provide further details. 

“We hereby inform you that NCLT Principal Bench, New Delhi vide order pronounced on March 8, 2019, has admitted the petition filed by ICICI Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016 in respect of an alleged default amount of Rs 853.83 crore,” Punj Lloyd said in the filing.

Last year in June, ICICI Bank had filed an application before NCLT against Punj Lloyd alleging default by the company.

However, at that time, its other lenders including SBI opposed the insolvency plea, saying that the company has several ongoing projects and favoured restructuring of its debts.

Punj Lloyd has total debt of around Rs 6,000 crore, in which ICICI Bank has debt of around Rs 854 crore.

News18 reported

ET: NCLT Ahmedabad clears ArcelorMittal’s Rs 42,000 crore resolution plan for Essar Steel

8 March 2019: National Company Law Tribunal (NCLT) Amedabad bench today cleared ArcelorMittal‘s Rs 42,000 crore resolution plan for Essar Steel takeover. 

Clearing ArcelorMittal’s bid, NCLT said it cannot impose judicial view over banks’ wisdom. 

Earlier, National Company Law Appellate Tribunal (NCLAT) had directed the NCLT Ahmedabad bench to take a decision on the resolution plan submitted by ArcelorMittal by March 8.

Earlier, on January 29, NCLT Ahmedabad had 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 NCLT had said that Rs 54,389-crore offer by Essar Steel Asia Holding, which is much higher than the ArcelorMittal’s Rs 42,000 crore bid, is not maintainable as the only way to make a proposal is through Section 12A.

Essar Steel owns a 10-million-tonne steel mill in Gujarat.

The Economic Times reported

MC: It may be JSW Steel vs ArcelorMittal for Asian Colour Coated Ispat

8 March 2019: Sajjan Jindal’s JSW Steel may square up with LN Mittal’s ArcelorMittal in the race for Asian Colour Coated Ispat, which was referred to the insolvency courts.

Sources told Moneycontrol that both companies will be submitting bids on March 8, the last day. Apart from the two, a host of funds too may also participate.

The contenders had submitted Express of Interest (EoI) in November last year. Asia Colour Coated has a debt of over Rs 4,000 crore. “The bids are expected to be in the region of Rs 1,200 crore,” said a senior industry executive.

Spokesperson of both the companies declined to comment.

This will be the third time that the two steelmakers will be facing each other. Both were in contention for the Italian steelmaker Ilva, and in India, Jindal had backed the Ruias in their bid to wrest back Essar Steel.

ArcelorMittal was selected as the preferred bidder by Essar Steel’s bankers, late last year. The Ahmedabad bench of National Company Law Tribunal (NCLT) is scheduled to give its order on ArcelorMittal’s bid later on March 8.

Asian Colour Coated Ispat has manufacturing facilities close to Delhi and Mumbai, and specialises in downstream, galvanised and colour coated products that it exports to Europe, Latin America and Africa. It has an annual capacity of one million tonne.

The downstream facility will benefit both JSW Steel and ArcelorMittal.

The Jindal company has been eyeing downstream assets as it looks to increase the proportion of high-value products in its portfolio.

“Today what is left (in the insolvency courts) are companies that either of smaller size or downstream. So, we are particularly evaluating downstream side more intensely than the integrated side,” JSW Steel Joint Managing Director and Group CFO Seshagiri Rao said in an earlier interview.

ArcelorMittal, which is favourite to bag Essar Steel, has been looking at facilities in other parts of the country that will complement its operations.

Talking about its India aspirations, the company had stated in its recently released 2018 Annual Report: “There is also a long-term aspiration to increase finished steel shipments to between 12 MT and 15 MT through the addition of new iron and steel making assets, so that ESIL (Essar Steel) can play an active role and fully benefit from the anticipated growth in the Indian steel industry.”

Moneycontrol reported

ET: NCLAT allows withdrawal of Liberty House bid for ARGL

8 March 2019: The National Company Law Appellate Tribunal (NCLAT) on Friday allowed the withdrawal of UK-based Liberty House bid for ARGL on the plea of resolution professional of the debt-ridden company.

A two-member bench, headed by Justice S J Mukhopadhaya, also pulled Liberty House for not pursuing the corporate insolvency resolution process after being selected as the highest bidder.

“You are a failure party all the time, dragging your feet. You are in bad reputation. We would not allow you to take advantage of the appellate tribunal,” the bench said.

NCLAT has upheld the previous order of the Chandigarh bench of NCLT, which had imposed a cost of Rs 1 lakh on Liberty House citing casual approach.

The appellate tribunal also directed to deduct the time period between December 14, 2018, and Friday from the resolution process.

Under the Insolvency and Bankruptcy Code, a resolution process has to be completed under 180 days with a further extension of 90 days to 270 days.

Meanwhile, NCLAT also said that its order would not debate Liberty House in participating in other resolution processes.

“Any observations against Liberty should not construed as finding against them ineligible from participating in any other resolution process,” NCLAT said.

Liberty House had emerged as the highest bidder in ARGL, a subsidiary of debt-ridden auto components maker Amtek Auto.

However, the company refused to go ahead and submit a bank guarantee after emerging as the highest bidder.

Following which, the resolution professional of the company moved NCLT to cancel the bid. NCLT had allowed it and imposed a cost on Liberty House.

This was challenged by Liberty House before NCLAT.

The Economic Times reported

ET: NCLAT allows Emaar MGF Land home buyers to file intervention applications

8 March 2019: The National Company Law Appellate Tribunal (NCLAT) recently allowed home buyers to file interlocutory application through their representatives.

It however adjourned the matter saying that let the Supreme Court first decide the issue. The SC on February 26, 2019 had ordered all parties involved to maintain status quo in the case related to the insolvency of Emaar MGF Land.

On January 24, 2019, NCLT-Delhi initiated corporate insolvency resolution process (CIRP) against Emaar MGF Land. However, on February 1, 2019 Hadi Mohd Taher Badri, director of Emaar MGF Land, moved National Company Law Appellate Tribunal (NCLAT) informing them that they have settled the case with the home buyer which filed the insolvency case.

Badri further appealed that since the insolvency resolution professional has not yet formed the committee of creditors and has not issued any public announcement, it should also be disposed off.

Home buyers, however, pleaded that the company should settle the case with all the buyers and not just one.
NCLAT on hearing both the petitions allowed Emaar MGF Land one chance to settle the case with the buyers. It also ordered the IRP to not issue any public announcement or constitute the committee of creditors until further order and listed the matter on February 28.

During the hearing, home buyers through their counsel advocate Aditya Parolia and advocate Piyush Singh produced the SC’s order post which NCLAT adjourned the matter.

NCLAT will now hear the case on April 4, 2019.

The Economic Times reported

LM: Cabinet offers relief to struggling power firms

8 March 2019:  The union cabinet has allowed power producers, saddled with 36,000 crore of unpaid dues, to end supply contracts with defaulting power distribution companies (discoms), as Prime Minister Narendra Modi’s government, in possibly its last cabinet meeting, addressed a pressing concern for the industry.

On Thursday, the Cabinet Committee on Economic Affairs approved recommendations made by a ministerial panel that allowed power generators to retain coal allocations linked to a supply contract even if the agreement is terminated because of payment defaults by power discoms.

The cabinet also cleared a new hydropower policy aimed at making purchase of electricity from such projects mandatory and offered financial incentives to make hydropower tariffs competitive with those using rival fuel sources.

The measures largely aimed at coal-fuelled power projects come at a time when power discoms have defaulted on payments to generation firms. The Modi administration believes that these steps will help ease some of the problems facing the sector. Non-performing assets (NPAs) in power generation comprise around 5.9% of the banking sector’s total outstanding advances of  4.73 trillion, according to the second volume of the Economic Survey 2016-17 issued in August.

CCEA also approved coal allocations for short-term supply contracts.

“Allowing domestic coal linkage for short-term PPAs (power purchase agreements) is positive for the independent power producers (with aggregate capacity of about 25GW who do not have long-term PPAs), also given the higher preference for short-term PPAs by many of the distribution utilities,” said Girishkumar Kadam, vice-president and sector head (corporate ratings) at ICRA Ltd, in a statement.

Briefing reporters on the decisions taken by the cabinet, power minister Raj Kumar Singh said the option of cancelling a supply contract in case of non-payment of dues by state-owned distribution utilities would offer flexibility to power generators. In the case of delayed payments, CCEA also made mandatory the levying of a late payment surcharge on discoms.

A high-level panel, headed by cabinet secretary P.K. Sinha, set up to address the issues of stressed thermal power projects submitted its report in November, after which a group of ministers was formed to examine them.

As part of the new hydro policy, the cabinet approved declaration of large hydropower projects as a renewable energy source, thereby making them a part of the renewable purchase obligation, which requires power discoms to purchase a fixed amount of renewable energy to cut dependence on fossil fuels.

The Live Mint reported

FE: NCLT rejects Karur Vysya Bank’s plea against ArcelorMittal plan for Essar Steel

8 March 2019: The Ahmedabad bench of the National Company Law Tribunal (NCLT) has rejected Karur Vysya Bank’s plea to quash Rs 42,000-crore resolution plan of ArcelorMittal for distressed Essar Steel on Thursday.

Rejecting the plea the two-member bench comprising Harihar Prakash Chaturvedi and Manorama Kumari stated that Karur Vysya Bank (KVB) had missed the deadline set by Supreme Court to stake its claim and KVB was not the financial creditor of Essar Steel.

On October 19, 2018, KVB had filed its claim before resolution professional of KSS Petron for Rs 3 crore in dues in which ArcelorMittal was a related party. However, the apex court had set the deadline of October 18, 2018, in its order given on October 4, 2018.

Based on it, NCLT said KVB was late in submitting its claim and hence couldn’t claim eligibility as a financial creditor. “The bench is bound by the deadline set by the Supreme Court and cannot reverse the clock for KVB,” the two-member bench noted.

The Financial Express reported