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NCLT reads insolvency rules at Orchid Pharma's promoter group firm

The bank's dues, by July 2018, were Rs 215.7 crore

Gireesh Babu  |  Chennai 

Drugs, Pharma, medicine

The insolvency resolution procedure will be applied on Orchid Healthcare, a promoter group company of Chennai-based Orchid Pharma, which is already under this procedure. The order, from the bench of the National Company Law Tribunal, was in response to a petition from IDBI Bank. It had loaned Rs 191 crore in July 2014 to Orchid Pharma, for which Orchid Healthcare was guarantor.

The bank's dues, by July 2018, were Rs 215.7 crore (a consortium of 24 banks had lent a total of about Rs 3,200 crore to the drug maker). With the borrower not repaying and also under the Corporate Insolvency Resolution Procedure, the petition from IDBI asked that this be also initiated on Orchid Heal­thcare. Noting there was no objection from the company, the tribunal's bench of B S V Prakash Kumar and S Vijayaraghavan has agreed to the request. And, appointed an interim Resolution Profes­sional. Orchid Healthcare has 22.64 per cent stake in Orchid Pharma, the biggest shareholder in the promoter group, as on end-December, according to the BSE. Orchid Pharma has been under financial stress for some years

The NCLT appointed an IRP for it with effect from mid-August 2017, on a petition from an operational creditor, Lakshmi Vilas Bank. Later, the Committee of Creditors (CoC) approved a resolution plan of US-based Ingen Capital, though with a significant haircut (dues write-off). However, Ingen did not pay the required amount and the NCLT nullified that resolution plan, on the RP's request.

Earlier this month, the RP called for a fresh Expression of Interest (EoI) from those interested, on a resolution plan for Orchid Pharma. The tribunal, through the order, also allowed 105 days for the CIRP, considering the time lost from the date of the previous EoI, of mid-November 2017, to the date of annulment of the approved resolution plan of Ingen. It has also reinstated the RP and the CoC, to ensure the company stays a going concern.

The RP has told the tribunal that it has e-mails from Divi's Laboratories, Gland Celsus Biochemicals and Fidelity Trading Corporation. And, oral enquiries from ART Capital (India), Everstone Group, Aion Capital, Piramal Capital and Finquest Group, expressing interest in proposing Resolution Plans.

First Published: Fri, March 29 2019. 00:59 IST