NCLT orders insolvency proceedings against Vadraj Cement | Mint
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Business News/ News / India/  NCLT orders insolvency proceedings against Vadraj Cement
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NCLT orders insolvency proceedings against Vadraj Cement

The ABG Shipyard group company defaulted on dues of more than ₹87 crore to Punjab National Bank

The NCLT bench appointed Pulkit Gupta, a partner at EY (debt and special situations) as the interim resolution professional Premium
The NCLT bench appointed Pulkit Gupta, a partner at EY (debt and special situations) as the interim resolution professional

Mumbai: The Mumbai bench of the insolvency tribunal has ordered initiation of insolvency proceedings against Vadraj Cement, a group company of the bankrupt ABG Shipyard, after the cement manufacturer defaulted on dues of more than 87 crore to state-run Punjab National Bank (PNB).

“Considering the facts and law, this bench is of the view that in such circumstances, it is imperative that corporate insolvency resolution process (CIRP) is only to be initiated in respect of the corporate debtor (Vadraj Cement). The default of the corporate debtor has been established and the application filed under Section 7 of the Insolvency and Bankruptcy Code (IBC) deserves to be admitted," a National Company Law Tribunal (NCLT) bench led by justices K.R. Saji Kumar and Sanjiv Dutt said in an order on 3 February.

The bench appointed Pulkit Gupta, a partner at EY (debt and special situations) as the interim resolution professional who will manage the day-to day affairs of the company. In November, the Economic Times reported that Adani Group, JSW Cement and ArcelorMittal were in running to buy the bankrupt Gujarat-based firm.

PNB, one of its creditors, had filed an application under the IBC to initiate insolvency proceedings against the cement company for defaulting on its dues.

The bank told the tribunal that despite repeated requests, the company failed to repay its dues. Following the default, the bank filed an insolvency application in September 2018, almost a year after its loan to the company was classified as a non-performing asset (NPA) in December 2017.

In August 2018, the Bombay High Court ordered Vadraj Cement to be wound up after trade creditor Beumer Technologies India dragged it to court to recover dues. The court, however, recalled the winding-up order and instead transferred the matter to the NCLT bench.

The company’s total debt stands at 7,000 crore, according to the ET report cited earlier, and lenders include government-owned banks like Union Bank of India, Central Bank of India, Indian Overseas Bank, Bank of India, and Bank of Baroda, besides PNB.

ABG Shipyard was one of the 12 largest non-performing accounts that RBI had, in 2017, asked banks to initiate insolvency proceedings against. Essar Steel, Jaypee Infratech, Bhushan Power & Steel, Amtek Auto, and Alok Industries were the other big names on the list.

While Punjab National Bank was represented by Prakash Shinde and Ruchita Jain of law firm MDP Partners, Vadraj was represented by advocate Suyash Shanker.

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ABOUT THE AUTHOR
Priyanka Gawande
Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.
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Published: 04 Feb 2024, 03:45 PM IST
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