Gujarat NRE Coke’s creditors reject lone bidder’s resolution plan2 min read . Updated: 02 Jan 2018, 01:27 AM IST
Gujarat NRE Coke may still not be ordered by the NCLT to be liquidated as the promoters are moving a higher court, seeking more time
Kolkata: The committee of creditors of beleaguered metallurgical coke producer Gujarat NRE Coke Ltd has rejected the lone resolution proposal received within the 270-day deadline under the insolvency code, but the company may still not be ordered by the National Company Law Tribunal (NCLT) to be liquidated as the promoters are moving a higher court, seeking more time.
On Monday, Sumit Binani, the NCLT-appointed resolution professional for Gujarat NRE Coke, submitted at the Kolkata bench of the NCLT that the committee of creditors had in its meeting on 28 December rejected the resolution plan proposed by Rare Asset Reconstruction Pvt. Ltd, an Ahmedabad-based firm.
The majority of creditors voted against the plan submitted by it, Binani said, following which the bench said it will pass its verdict on 8 January.
The Jagatramka family, founder shareholders or promoters of the firm, is likely to move a higher court seeking relief, said L.P. Tiwari, their legal counsel.
Arun Kumar Jagatramka, who ran Gujarat NRE Coke as chairman and managing director, had planned to submit a resolution plan but could not in the wake of amendments to the insolvency code in November barring loan defaulters from bidding.
Last week, the government passed another amendment to the insolvency laws, making way for promoters to bid for their companies’ assets provided they paid up and cleared their dues to banks.
Rare Asset Reconstruction’s bid had valued Gujarat NRE Coke’s assets at around Rs420 crore, debt and equity combined, said a person familiar with the offer. This was higher than the assessed “liquidation value" of the company, which is Rs360 crore, this person said, asking not to be identified. The company owes in all around Rs4,600 crore, and can produce up to 1.5 million tonnes of metallurgical coke.
Anil Kumar Bhandari, managing director of Rare Asset Reconstruction, said his company’s bid was “substantially higher" than the liquidation value, but he declined to put a specific figure. He said he wasn’t aware that his company’s bid had been rejected by the committee of creditors.
Binani said Gujarat NRE Coke had over 2,000 employees and that they had come together to submit a resolution plan. But it could not be considered within the stipulated timeframe.
Because some 2,000 jobs are at risk, the firm should not be liquidated overnight, Binani said, adding that he was seeking legal counsel on ways to get more time to find an optimal resolution plan.