The National Company Law Appellate Tribunal (NCLAT) on Monday stayed Vedanta group firm Twin Star Technologies’ proposed takeover of Videocon Industries Ltd through the insolvency resolution process.
The Tribunal was hearing a plea filed by Bank of Maharashtra and IFCI opposing that the value realized through the sale to Twin Star Technologies is less than the liquidation value and also that a bulk of the payment will be made through non-convertible debentures (NCDs).
NCLT had initiated the Corporate Insolvency Resolution Process against the 13 group entities of Videocon on a plea filed by State Bank of India on behalf of the lenders.
The NCLT had also asked the Insolvency and Bankruptcy Board of India to see whether confidentiality was maintained during the corporate insolvency resolution process as Twin Star’s bid was very close to the liquidation value, which was meant to be confidential.
A two-member NCLAT bench consisting of Chairperson Justice A.I.S. Cheema and Member Dr. Alok Srivastava observed, “It is argued that it is matter of concern that the Corporate Debtors in the consolidated proceedings had cash of Rs. 200 Crores and the SRA would bring in just 262 Crores and from that also first payment of Rs. 200 Crores will be brought in 25 Months. Beyond Rs. 262 Crores the rest was being brought in only by way of NCDs to be paid in six years.”
Further the bench said that considering the observations of the Adjudicating Authority and the submissions made by the Learned Sr. Counsel for Appellants in both these Appeals and the grounds raised in these Appeals, and considering the exceptional facts of present matter the Impugned Order is stayed till the next date and status quo ante as before passing of the Impugned Order is directed to be maintained. Resolution Professional will continue to manage the Corporate Debtors as per provisions of IBC till the next date.
The matter will be next schedule for hearing on September 7.