Innoventive Industries, India’s first company to be tried under the new Insolvency and Bankruptcy Code, has failed to finalize a debt resolution plan in the stipulated six months, prompting the National Company Law Tribunal (NCLT) to extend the deadline by another three months – the maximum permissible – before liquidation. If the company fails to resolve the debt problem in the next three months with banks taking a haircut and promoters bringing in equity, it would face liquidation. The company manufactures steel tubes and auto parts for various large auto companies.
As creditors and the borrower could not conclude on the revival plan, they agreed on seeking the additional time, three sources familiar with the matter told ET. “The promoter may too bid for the company on a personal capacity, a move aimed at preventing a possible liquidation of the company as there is disagreement over the revival plan,” said one of the persons cited above.
On August 31, 2017. The Supreme Court of India in the case of Innoventive Industries Limited v. ICICI Bank Limited delivered its first extensive ruling on the operation and functioning of the Insolvency and Bankruptcy Code, 2016 (Insolvency Code). In which it is of the considered view that the Tribunal and the Appellate Tribunal were right in admitting the application filed by the financial creditor ICICI Bank Ltd. There were two arguments taken up by appellant (Innoventive Industries) before NCLT, later before NCLAT and these arguments finally dismissed by Supreme Court. It appears that Innoventive Industries was trying to buy time to come up with a suitable resolution plan or even a strategy to save its company from going into liquidation.
Financial Performance of Innoventive Industries Ltd.
Table 1: Financials of Innoventive (All Figs. in INR Crores)
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