The Guwahati Bench of the National Company Law Tribunal (NCLT) has appointed Vinod Kumar Kothari
as an interim resolution professional (IRP) to manage the 178-year-old Assam Company
India Ltd, India’s oldest tea
plantation & oil exploration company. According to industry players, this is the first such case in the plantation sector, but there could be more in the time to come.
Assam Company, with its assets comprising 14 tea
estates, also has participating interests in oil & natural gas exploration in Assam. It employs 16,500 people, directly or indirectly.
While company officials were not immediately available for comments, NCLT
documents and the company's annual report show debt (including principal amount), interest due but not paid, and interest accrued but no due, working out to around Rs 736.25 crore.
In 2016-17, the company's loss had increased to Rs 70.79 crore from Rs 53.31 crore a year earlier. For the quarter ended June 30, 2017, the company reported a loss of Rs 21.38 crore, against Rs 22.47 crore a year earlier. In the plantation segment, where Assam Company
primarily operates, it reported a loss of Rs 13.55 crore, against Rs 13.52 crore in the year-ago period. In the oil & gas segment, the company reported a loss of Rs 31.17 lakh, versus Rs 1.60 crore a year earlier.
The appointment of an IRP
comes after a petition filed by Srei Infrastructure, a creditor that extended a term loan of Rs 100 crore with Assam Company
as one of the guarantors.
Srei claimed that the company, as on August 11, 2017, owed it a little over Rs 595.60 crore. Assam Company, on the other hand, argued that Srei had claimed different amounts in different documents.
Now, the IRP
has called for an expression of interest for valuation of assets and properties of Assam Company. IRP
Kothari, in a communication to the company’s employees, said the initiation of insolvency
proceedings was merely a recognition that there was a need to take some remedial action for resolving the present situation. The remedial action is based on a resolution plan to be presented and accepted by the creditors. It would thereafter be ordered by NCLT.
At the preliminary stage, there is no reason for any concern about the company. In fact, one of the primary obligations of the IRP/RP during the resolution was to maintain “the going concern nature” of the company, he said.
Bidyananda Barkakoty, advisor to North Eastern Tea
Association, said an uncertainty over regulations would lead to more plantation companies
going bankrupt, given the current prices of tea
and increasing production cost, especially in the Northeast. Most of the companies
are making losses, and only a handful are reporting break-even, he added.