Deccan Chronicle Holdings has received an additional 87 days to wrap up its insolvency resolution process beyond the 270-day initial deadline, on account of litigation. The Hyderabad bench of the National Company Law Tribunal (NCLT) has extended the time for this till July 10.
The Hyderabad Bench of the National Company Law Board, without extending the 270-day period, has ordered exclusion of 87 days from 270 days, on account of the time consumed by litigation.
According to Insolvency and Bankruptcy Code (IBC) norms, restructuring a company has to conclude within 180 days after NCLT admits an insolvency case. This deadline can be extended by 90 days, after which extensions are not permitted. A firm’s assets will be liquidated after 270 days. Last July, Deccan Chronicle was taken to the NCLT by Canara Bank, with a debt of around Rs 40 billion.
The 270-day deadline is April 4. The firm has received Expressions of Interest from eight companies, including Essel, HT Media, Asianet, Times and Srei. The reasons cited by the tribunal for providing relief are delay due to litigation and time gap between the change in insolvency resolution professionals (IRPs). Earlier, K K Rao was appointed IRP; but last month, Mamta Binani was appointed the new IRP.
The judgement took cognizance of an earlier case at the National Company Law Appellate Tribunal (NCLAT) between Quantum and Indus Finance Corporation while considering whether an application seeking extension of time could be filed after the expiry of 180 days. There are around 1,400 employees directly employed at Deccan Chronicle. It provides indirect employment to 600 employees through contract services.
Other dependents include around 7,000 newspaper distribution agents and 20,000 hawkers, the judgement noted.