Gujarat NRE Coke gets NCLT nod to sell assets
Kolkata: In a first, the Kolkata bench of the National Company Law Tribunal (NCLT) has partially withdrawn a moratorium it had imposed on sale of assets of an insolvent company, paving the way for Gujarat NRE Coke Ltd to sell its wind power assets to firms controlled by Dilip Shanghvi, the promoter of India’s drug maker Sun Pharmaceutical Industries Ltd.
Gujarat NRE Coke had concluded an agreement on 1 April to transfer its windmills that generate 85mw of power to firms controlled by Shanghvi for Rs180 crore. The deal was approved by Gujarat NRE Coke’s lenders, and the prospective buyers have already paid a quarter of the total consideration as advance, according to the interim order passed by the Kolkata bench of the NCLT.
The book value of the asset at the end of March 2016 was Rs285 crore, according to Gujarat NRE Coke’s annual report, which means the windmills are to be sold at a significant loss.
Even before the windmills were transferred, Gujarat NRE Coke voluntarily moved the NCLT, declaring itself insolvent. According to the interim order, the company owes its lenders and creditors around Rs4,600 crore. Admitting the application in early April, the tribunal appointed a resolution professional, or an administrator, and imposed a moratorium on sale of assets, halting the sale of the wind mills as well.
Gujarat NRE Coke moved the NCLT again, this time seeking permission to conclude the sale of the wind mills to avoid further diminution in the value of its assets. Earlier this week, the tribunal passed an order granting permission to the resolution professional to conclude the sale of the company’s wind power assets, but asked the resolution professional not to distribute the sale proceeds among the lenders immediately.
Sumit Binani, the NCLT-appointed resolution professional currently running Gujarat NRE Coke, said he would inform the committee of creditors about the order of the tribunal allowing the sale of the windmills. A decision on concluding the sale of windmills will be taken in consultation with the creditors, he added.
Shanghvi has in the past invested in Suzlon Energy Ltd, an arm of which used to maintain and operate Gujarat NRE Coke’s windmills. But Suzlon Global Services Ltd has terminated the operation and maintenance contract with Gujarat NRE Coke because of non-payment of dues, says the tribunal’s order.
A spokesperson for Sun Pharmaceutical declined to comment on the story.
The value of the mothballed assets is “depleting day by day”, the tribunal said in its order, adding that it is feared that the prospective buyers could “retract from their original offer” if the windmills are not sold immediately. The committee of creditors have “unanimously” agreed to sell them, the order says.
Soumonty Kanungo in Kolkata contributed to this story
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