 "Reid & Taylor")
After potential bidders, including numerous investment firms and asset reconstruction companies, backed out from placing bids for acquisition of the stressed assets of Reid & Taylor (R&T) India, thereby leading it to liquidation, Hong Kong-based SPGP Holdings (HK) Limited has evinced interest to acquire the firm.
A petition filed by the R&T employees’ association in the Mumbai bench of the NCLT stated that this Hong Kong company, which has a $250 million pool for investments in India, has been in talks with the association for a possible takeover.
In case the deal materialises, it will be the first instance under the Insolvency and Bankruptcy Code (IBC) when employees of an insolvent company have been able to rope in an investor to save the firm from liquidation.
“One of the directors of the investor, Pankaj Agarwal, had appeared before the NCLT and evinced interest in acquiring this company,” said Prasanna MS, general secretary of the R&T workers' association.
The workers have informed about SPGP Holdings’s potential interest to the resolution professional who in turn has to now undertake a due diligence process, check credibility of SPGP Holdings and communicate it to the Committee of Creditors (CoC).
Sources said that the 270-day period under the IBC framework lapsed on January 1 and thus the company has to go into liquidation. “Now, if SPGP is interested, it has to directly submit a resolution plan to the NCLT before February 7,” a source among the company’s creditors said.
Lenders are seen taking a huge haircut on the sale of R&T as its total debt amounts to over Rs 4,000 crore, but the liquidation value of R&T is estimated around Rs 150 crore.
Sources suggested that a resolution plan, if it is finally submitted by SPGP Holdings, will cover the liquidation value only.
“After a resolution plan gets submitted and the NCLT asks us to review it, we need to check if it would be worthwhile to pass that plan or liquidate the company for recovery of dues. The asset quality of R&T is good but we are perplexed why potential bidders didn’t submit any bid at all,” the lender’s source said.
A petition filed by the R&T employees’ association in the Mumbai bench of the NCLT stated that this Hong Kong company, which has a $250 million pool for investments in India, has been in talks with the association for a possible takeover.
In case the deal materialises, it will be the first instance under the Insolvency and Bankruptcy Code (IBC) when employees of an insolvent company have been able to rope in an investor to save the firm from liquidation.
“One of the directors of the investor, Pankaj Agarwal, had appeared before the NCLT and evinced interest in acquiring this company,” said Prasanna MS, general secretary of the R&T workers' association.
The workers have informed about SPGP Holdings’s potential interest to the resolution professional who in turn has to now undertake a due diligence process, check credibility of SPGP Holdings and communicate it to the Committee of Creditors (CoC).
Sources said that the 270-day period under the IBC framework lapsed on January 1 and thus the company has to go into liquidation. “Now, if SPGP is interested, it has to directly submit a resolution plan to the NCLT before February 7,” a source among the company’s creditors said.
Lenders are seen taking a huge haircut on the sale of R&T as its total debt amounts to over Rs 4,000 crore, but the liquidation value of R&T is estimated around Rs 150 crore.
Sources suggested that a resolution plan, if it is finally submitted by SPGP Holdings, will cover the liquidation value only.
“After a resolution plan gets submitted and the NCLT asks us to review it, we need to check if it would be worthwhile to pass that plan or liquidate the company for recovery of dues. The asset quality of R&T is good but we are perplexed why potential bidders didn’t submit any bid at all,” the lender’s source said.
