Legal representatives appearing on behalf of IndusInd Bank and DBS Bank have filed applications with the National Company Law Tribunal (NCLT) in Mumbai, opposing the current resolution plan of Jyoti Structures.
The legal representatives stated that improper procedures were followed during the voting on the resolution plan. A group of high net-worth investors led by Sharad Sanghi, chief of Netmagic Solutions, are the only party interested in acquiring Jyoti Structures.
Lenders will receive Rs 30 billion over a period of 15 years, as per the existing resolution plan placed by the group of investors, while they infuse around Rs 1.5 billion to Rs 1.70 of equity capital.
Jyoti Structures, the engineering, procurement and construction company, was referred to the NCLT for proceedings under the Insolvency and Bankruptcy Code (IBC) in June 2017.
The company owes lenders around Rs 70 billion, and was part of the Reserve Bank of India’s first list of stressed companies to be taken for insolvency proceedings.
Further, they stated that some financial creditors initially had either voted against the plan or abstained from voting, but as the deadline for the Corporate Insolvency Resolution Process (2 April 2018) was approaching, these lenders changed their vote.
In a previous hearing Vandana Garg, Resolution Professional for Jyoti Structures, had informed the NCLT that 81 per cent of the Committee of Creditors had approved of the plan.
The investor group led by Sanghi also includes private equity executive Manish Kejriwal and Manipal Group’s Ranjan Pai. According to the resolution plan they have also sought fresh working capital loans worth Rs 2.5 billion, while bank guarantees totalling Rs 10 billion would be extended for the company, once the acquisition is complete.
The NCLT will hear the pleas from the lenders on 20 July.