Insolvency process: CoC open to new bids for Deccan Chronicle, says NCLT

Vision India Fund's original resolution plan had failed to get the mandatory 66 per cent vote in the CoC earlier

Last Updated : Jul 24 2018 | 3:37 AM IST

The Committee of Creditors of Deccan Chronicle Holdings Limited (DCHL) was open to examining fresh resolution applications, including a modified resolution plan submitted earlier this month by Srei group’s Vision India Fund, The Hyderabad Bench of the National Company Law Tribunal said on Monday.

On Friday, the National Company Law Appellate Tribunal (NCLAT) set aside the Hyderabad Bench’s orders dated November 16, 2017, which barred Srei Infra Finance from becoming a member of Committee of Creditors (CoC) on grounds of being a related party.

The appellate tribunal also excluded the appeal-to-order period of seven months and nine days and directed the bench to keep the insolvency resolution process open.

The development came at a time when Hyderabad Bench was about to take a call on DCHL’s resolution professional Mamata Binani's plea for extending the time of the resolution process. The resolution professional wanted moe time for the CoC to examine Vision India Fund’s modified resolution plan. The NCLAT orders effectively gave an additional seven months to decide on a new promoter for SCHL, which owed around Rs 800 billion to financial and operational creditors.

Vision India Fund’s original resolution plan had failed to get the mandatory 66 per cent vote in the CoC earlier.

Last year, the Hyderabad Bench disallowed Srei's claim for a place in the CoC as a financial creditor, citing an allotment of 660 million shares in DCHL in its favour through conversion of a portion of debt into equity based on the loan agreement between the lender and the borrower. These shares were allotted for Rs 200 million out of the total loan of Rs 2.40 billion advanced by Srei.

The appellate authority said the allotment of shares to Srei Infra Finance was not accepted by the stock exchange.

Hearing a couple of interim applications, including that of the resolution professional in the DCHL case on Monday, Judge Ratakonda Murali of the Hyderabad Bench stated that he would issue necessary orders in the light of appellate authority’s judgement in Srei’s appeal.