109 retail investors pitch for Gujarat NRE Coke revival

As many as 109 retail investors have come together to revive the debt-ridden Gujarat NRE Coke Ltd which is facing liquidation, an official said on Wednesday.

The revival plan, which has been submitted by the retail investors who hold less than one per cent stake in the company, will be placed in a meeting for approval of creditors, FCCB holders and shareholders, he said.

The meeting is slated to be held on February 21.

"The February 21 meeting has been convened as per direction of the Kolkata bench of the National Company Law Tribunal to discuss and decide on the resolution plan proposed by the 109 shareholders who are also employees of the company.

"The meeting will seek approval of creditors, FCCB holders and shareholders," the official liquidator of Gujarat NRE Coke Ltd, Sumit Binani told PTI.

There are rumours that the erstwhile promoter of the company Arun Jagatramka has been actively backing the plan.

Asked about this, Jagatramka said, "I am not a party to these proceedings and it will not be proper for me to comment on this matter. If somebody is trying to revive the company, it is good for 1,100 employees," he said.

In October last year, a two-member bench of NCLAT headed by Chairperson Justice S.J. Mukhopadhaya did not allow Jagatramka to negotiate with the creditors of the metallurgical coke producer as he was declared ineligible to be a resolution applicant of the company under the Insolvency and Bankruptcy Code (IBC).

"My appeal against NCLAT order is pending in Supreme Court and I am confident of getting a favourable order," he said.

He also alleged that "a commercially-viable company has been forced into liquidation due to inaction on the part of bankers who have been apprehensive of investigative agencies".

According to the resolution plan, all admitted claims of the secured creditors of Rs 3,800 crore will be settled, the official said.

The plan involves Rs 400 crore term loan at 8.10 per cent interest, issue of equity shares worth Rs 380 crore and compulsory redeemable preference shares worth Rs 3,021 crore, according to a notice issued to the shareholders.

The claims of foreign currency convertible bond (FCCB) holders aggregating Rs 144 crore will be converted into equity, it said.

The dues of Rs 1,343 crore to the unsecured creditors will be settled by issuing equity shares worth Rs 335 crore and the rest, Rs 1,007 crore, will be written-off, the notice said.

The company owes about Rs 5,000 crore to secured and unsecured creditors while the liquidation value of the company was pegged at Rs 350 crore, the official said.