TCG, Apeejay interested in Assam Company, which has filed for insolvency

Exceeding expectations of the lenders of Assam Company India Ltd, undergoing bankruptcy proceedings at the Guwahati bench of the National Company Law Tribunal (NCLT), the world’s first tea company has found at least 10 suitors.

Among those which have given an Expression of Interest (EOI), at least five are tea producers, while two are asset reconstruction companies (ARCs). The former comprise the diversified Apeejay Group, Warren Tea, Luxmi Tea Company that owns the Makaibari tea estate, MK Shah Exports and Dhunseri Petrochem. The last one is present in both tea and oil, a portfolio perfectly matching the potentially insolvent firm.

The ARCs are Arcil Asset Reconstruction Company and Suraksha Asset Reconstruction. Purnendu Chatterjee, the non-resident who owns The Chatterjee Group (TCG), which is into petrochemicals and oils, has also placed an EOI. So, too, to the surprise of the lenders, has Global Coal Mining, a mining and coal washery firm.

Hyderabad-based Megha Engineering & Infrastructures has also done so, with the necessary documents; however, it hasn’t paid the process participation fees or the earnest money deposit. Sources say although TCG’s immediate interest is on the Amguri oilfield in Assam, up for sale, it wants to foray into tea at a time when the sector is showing signs of improvement, with prices on the rise. Calls and messages to Chatterjee went unanswered.

For Dhunseri Petrochem and other tea producers, acquisition of Assam Company’s 14 prized estates will add to their production capacity and might help them manufacture boutique tea. For TCG and Global Coal Mining, it will be a new foray. It has been suggested the ARCs might be aiming to resell the assets of Assam Company after making a turnaround. Previously, sources had suggested the sale of Assam Company could be difficult, owing to its nearly Rs 14 billion in dues, nature of business and lack of assets in the oil vertical.

However, based on a challenge on the eligibility criteria by MK Shah Exports, the NCLT bench has ordered a revision of the eligibility criteria and directed the Resolution Professional (RP) to go for a modified EOI. T Kannan, the RP, had said any company wishing to bid must have a net worth of at least Rs 4 billion and a surplus fund of Rs 500 million.

For the ARCs and other financial entities, the assets under management should be at least Rs 40 bn for the preceding three financial years or the commutted fund available for investment should be Rs 20 bn.

However, the NCLT order doesn’t affect the companies which have already given an EOI. Sources said the RP, in consultation with the Committee of Creditors, is considering whether to contest NCLT’s order at the appellate tribunal. Kannan declined to comment. The last day for submission of a resolution plan is May 21.

A forensic audit of Assam Company’s account is also on, to detect any irregularities in the finances.

Set up in 1839 by an act of the British parliament, this was India’s first tea plantation company and also a pioneer in oil exploration in Assam, way back in 1889. Among its founding directors were Dwarkanath Tagore, ancestor of Nobel laureate Rabindranath Tagore, and Babu Motilal Seal.