According to a source close to the development, “Edelweiss ARC’s plan was rejected in the first round of bidding for Adhunik Metaliks, and in the second round, the company did not submit its plan.”
The Kolkata bench of the National Company Law Tribunal (NCLT) on Friday kept the issue of exclusion of requisite number of days from the mandated 270-day deadline under the insolvency resolution process for Adhunik Metaliks open for adjudication. It directed all the parties involved in the case to file affidavits within two weeks. Notably, the resolution professional (RP) of the insolvent company, Sumit Binani, on May 1 had urged the tribunal to exclude 20 days from the stipulated 270-day deadline so that in this additional time the revised resolution plan of UK-based Liberty House could be considered. Earlier, the committee of creditors (CoC) had identified Liberty House as the highest bidder (H1).
Appearing before a division bench of the tribunal, comprising justices Jinan KR and Madan Balachandra Gosavi, advocates Sidhartha Sharma and Namrata Basu, appearing on behalf of the RP on Friday, said, “A lot of time has been lost while negotiating with Liberty House. The company has taken time to clarify its stand as an eligible resolution applicant under Section 29A.” Notably, for the debt-laden steel maker, the stipulated 270-day under the Corporate Insolvency Resolution Process (CIRP) expired on April 29, and during this period no resolution plan for the company was approved by its CoC.
There are only two resolution applicants —Liberty House and Maharashtra Seamless of the DP Jindal Group, according to the resolution professional. According to sources, after negotiation, Liberty House’s offer currently stands at close to Rs 600 crore. When contacted, a Liberty House spokesperson said she could not offer any comment on the number. As per the Insolvency and Bankruptcy Code (IBC) norms, an insolvent company is to be liquidated if during the moratorium of nine months no successful resolution plan is in place. In his submission, workers’ union counsel Abhrajit Mitra also appealed before the bench to provide additional time for the resolution process by excluding the requisite number of days from the mandated 270-day deadline for approval of a successful resolution plan for Adhunik Metalik. “Please do not liquidate the company as it will affect many workers and their families. Kindly allow more time for the CIRP process for selecting a successful resolution applicant.”
After the submissions of different parties, the bench on Friday did not pass any order on exclusion of days from the CIRP process, keeping the matter open for adjudication. The next hearing in the case is fixed on June 6. The bench directed all the parties to file their affidavits within two weeks. Meanwhile, Edelweiss Asset Reconstruction Company alleged that the CoC did not consider its plan, claiming that it was the H1 bidder. “My plan was rejected even before it was being considered,” Edelweiss ARC counsel Manju Bhuteria said in her submission before the bench, moving an application, challenging Liberty House’s resolution plan under Section 29A.
According to a source close to the development, “Edelweiss ARC’s plan was rejected in the first round of bidding for Adhunik Metaliks, and in the second round, the company did not submit its plan.” Message sent to Edelweiss did not elicit any response till the time of going to the press. Bankruptcy proceedings against Adhunik Metaliks (AML), its subsidiary Orissa Manganese & Minerals (OMML), and Adhunik Group companies Zion Steel and Adhunik Alloys & Power, were admitted by the Kolkata bench of NCLT in August last year. The insolvency petitions had been filed by the State Bank of India (SBI). Notably, for Orissa Manganese & Minerals, lenders approved a resolution plan submitted by Kolkata-based Ghanashyam Mishra & Sons. However, Edelweiss ARC on May 1 said it was opposing the resolution plan approved by the CoC. “My offer was the highest, but it was not considered,” Edelweiss
ARC counsel Manju Bhuteria had said in her submission before the bench. For Zion Steel, Liberty House is also the highest bidder. For this company also the RP had urged the Kolkata bench of the tribunal to exclude around 20 days from the mandated 270-day deadline. SBI, which leads the consortium of lenders to the companies, had in July last year filed insolvency petitions over non-payment of loans worth about Rs 940 crore OMML and Rs 812 crore by AML. The bank had also claimed dues from Zion Steel, as it was a co-obligator to the loans disbursed to OMML and AML under the provisions of the master restructuring agreement and the common loan agreement signed in March 2014.