Facor, one of India’s oldest producers of ferroalloys, is likely to be liquidated after the NCLT Kolkata bench was informed on Monday that its Committee of Creditors has rejected all bids.
Facor has been under insolvency resolution process and the 270-day period for insolvency resolution of the company got over on April 2, 2018.
Facor received bids from Swiss-based metals trading group IMR, IMFA Ltd, one of the country’s largest integrated ferroalloys producer, Rural Electrification CorporationBSE -1.29 % (REC) and a couple of lesser known players like Synergy Steel and Anik IndustriesBSE -1.39 %. While Balasore Alloys had evinced interest in the company, it did not submit a bid. The original deadline for submitting bids was on February 7, which was extended three times till March 29. While the IMR and IMFA had submitted bids before the first deadline, the three other players entered the fray after the deadline was extended a third time.
IMFA, one of the resolution applicants for Facor, intervened in the matter on Monday seeking consideration of its bid which it felt was wrongly rejected.
IMFA s appeal against Facor ’s Corporate Insolvency Resolution Process is pending before National Company Law Tribunal (NCLT) which has reserved its order though no stay has been granted on the liquidation. The next hearing is due on April 11. KG Somani, the resolution professional for Facor is a Delhi based CA. FACOR, which is owned by the Saraf family, has a 45 MVA furnace with three mines and 100 MW power plant with its subsidiary Facor Power. It defaulted on loans worth `750 crore while the company’s liquidation value was about Rs 400 crore.
REC has over 90% exposure in Facor’s debt. Established in 1955, Facor operates captive chrome ore mines. However, output reduced with two mines having been shut down altogether. The company was referred to CIRP in June 2017 on account of default by Facor Power to the tune of Rs 750 crore. The group started out with a ferromanganese plant in Shreeramnagar, Andhra Pradesh, and diversified into various types of ferroalloys. Later, it established a large chrome ore mining complex at Bhadrak in Odisha, followed by the first charge chrome plant in 1981.
Source: Economic Times