The Mumbai bench of National Company Law Tribunal (NCLT) on Wednesday approved the resolution plan for Jyoti Structures presented by the Resolution Professional on behalf of a group of investors led by Sharad Sanghi and others.
In the last hearing, the tribunal had asked the RP to submit the revised plan wherein Sharad Sanghi led group of investors will pay Rs 3965 crore in 12 years as against the 15 year period sought by him in his previous bid.
According to the resolution plan approved today, Rs 3,692 crore will go to the banks over the span of 12 years. Rs 115 crore will be paid to the operational creditors in 7 years, Rs 147 crore will go to the workforce and will be paid immediately. Moreover, Rs 11 crore statutory dues will be paid immediately.
The total debt of Jyoti Structures involved in engineering, procurement and construction is to the tune of Rs 7010.55 crore. Jyoti Structures is one of the first twelve companies that faced the insolvency proceedings after the law was enacted.
DBS bank, however, was asking for a stay on the proposed resolution as the plan does not give them any priority as ‘the first charge holder’. DBS bank has an exposure of around Rs 53 crore to Jyoti Structures. The consortium of lenders was led by the State Bank of India (SBI). DBS bank will approach the Supreme Court in this matter now.
Earlier, the National Company Law Appellate Tribunal (NCLAT) had set aside the order of NCLT to liquidate Jyoti Structures and asked the tribunal to consider the resolution plan proposed by Sharad Sanghi and others and pass an order in the matter within two weeks. And the liquidation value assigned to the company was Rs 1,112.52 crore.
The NCLT had earlier rejected the resolution plan submitted by Sharad Sanghi and had asked for liquidation of the company because the 270 day period assigned for corporate insolvency resolution process (CIRP) had expired.
Moreover, initially the resolution plan was not approved by the committee of creditors with a majority.
Earlier, Sanghi's resolution plan was voted by 62.66 per cent voting shares of the committee of creditors, while members with 23.12 per cent had voted against and the remaining 14.21 per cent remained abstained on March 26 and 27, 2018. Later, some members of CoC changed their plans and, finally, tally was reached to 81.31 percent of the total votes on April 2, 2018.