JM Financial ARC offers to buy out all outstanding loans of Gujarat NRE Coke
Kolkata: JM Financial Asset Reconstruction Co. Pvt. Ltd has offered to buy out all outstanding loans to Gujarat NRE Coke Ltd, an embattled company for which the Kolkata bench of the National Company Law Tribunal (NCLT) has already appointed a resolution professional, or administrator.
The company, according to the submissions of the resolution professional, owes its creditors around Rs4,600 crore.
JM Financial is already invested in Gujarat NRE Coke, and is one of 16 so-called financial creditors of the company, resolution professional Sumit Binani said in a submission the Kolkata bench of NCLT on Wednesday.
A spokesperson for the JM Financial group declined to comment immediately. The asset reconstruction company (ARC) of the group is one of the biggest in India.
Consulting firm PwC was tasked with preparing a “resolution plan” for Gujarat NRE Coke, according to Binani.
After several rounds of discussions over the plan submitted by PwC, JM Financial offered to buy out other secured creditors in a meeting of the committee of creditors on 24 August, Binani said in his submission to the Kolkata bench of the National Company Law Tribunal .
On Wednesday, Binani asked the bench for extension of deadline for preparation of a resolution plan. The mandatory 180-day period ends in early October, and Binani asked for the deadline to be extended by 90 days. He said almost all creditors supported the request for extension of the deadline.
Binani said JM Financial was not looking to liquidate the company and that if it managed to buy out other creditors, it will work with the company to implement the resolution plan. The company, according to the administrator, was still in operation, though utilizing only about 35% of its capacity and generating Rs25-30 crore in revenue every month.
Meanwhile, Gujarat NRE Coke is struggling to rescue its deal to sell its wind power assets to enterprises controlled by Dilip Shanghvi, according to lawyers, who asked not to be named. An agreement had been signed to sell the company’s 60 windmills to the promoter of Sun Pharmaceutical Industries Ltd, one of India’s biggest drug makers, for Rs180 crore.
But even before the windmills were transferred, Gujarat NRE Coke on its own moved NCLT, declaring itself insolvent. This stalled the sale as NCLT imposed a moratorium on transfer of assets. Binani moved the bench and last month secured permission to transfer Gujarat NRE Coke’s windmills to Shanghvi’s enterprises.
An official of State Bank of India, one of the lenders, said Shanghvi’s enterprises are no longer interested in taking over the windmills, and they want a refund of the advance made for the deal. The buyers had paid around 25% of the Rs180 crore as advance, this person added, asking not to be named.
A spokesperson for Shanghvi had refused to comment on the matter earlier.
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