Anil Agarwal-controlled Twin Star Technologies Ltd has appealed in the Supreme Court against the National Company Appellate Tribunal’s (NCLAT) stay restraining the takeover of Videocon Industries, in a new twist to the insolvency proceedings. Twin Star has argued that the dissenting financial creditors will receive the liquidation value and the payment will be made on priority.
Last month, the dissenting creditors including Small Industries Development Bank of India (SIDBI), IFCI and Bank of Maharashtra had filed a plea in NCLAT opposing the existing plan, arguing that the value realized through the sale to Twin Star is less than the liquidation value and also that a bulk of the payment will be made through non-convertible debentures (NCDs).
In its appeal to the apex court, Twin Star has argued that the amount to be given to the dissenting creditors will be decided at the time of the payout. It, therefore, said, “the creditors’ contention that the liquidation value is lesser than what was earlier disclosed is premature, baseless and without any merit.”
The case is yet to be listed and is expected to come up for hearing next week.
Twin Star has offered to pay ₹2,962 crore for all 13 group firms of Videocon against admitted claims of ₹64,838 crore. This comprises only 4.15% of the total outstanding claim and implies a 95.85% haircut for creditors. The NCLAT order had also noted that the dissenting creditors’ argument that Twin Star will not make any upfront cash payment and will instead pay the first instalment following the issuance of NCDs after 25 months. To this, the Twin Star, in its SC appeal, has argued that the payment to the dissenting creditors will be paid in the form of cash as per the insolvency and bankruptcy regulations.
Videocon, a consumer durables manufacturer of air-conditioners and washing machines, was among the first 12 companies pushed into bankruptcy after directions from the Reserve Bank of India in 2017. In December that year, State Bank of India had filed an insolvency petition against Videocon. Separate bankruptcy proceedings were also initiated against 15 Videocon Group companies. The tribunal had excluded two Videocon Group entities—KAIL Ltd and Trend Electronics Ltd—from the scope of consolidation and had appointed Abhijit Guhathakurta as the resolution professional for the group insolvency process.
Source: Mint