The Mumbai bench of National Company Law Tribunal (NCLT) has ordered liquidation of engineering, procurement and construction (EPC) company Hindustan Dorr-Oliver and its associate HDO Technologies after lenders failed to approve the resolution proposal submitted by the company.
NCLT, through its winding-up order delivered on Monday, directed the resolution professional Amit Gupta to act as liquidator. All powers of the board of directors and key managerial persons and the partners of the company cease to have effect and the same will be vested with the liquidator.
“Unsecured and operational creditors are unlikely to receive any dues as the company in its earlier hearings in the court has already mentioned that its assets may not be sufficient to serve secured lenders themselves,” said Anil Agarwal, lawyer who represented some operational creditors of the company in the Bombay High Court earlier.
Lenders include Bank of India, Andhra Bank, ICICI BankNSE -0.29 % and Standard Chartered Bank with dues worth over Rs 1,000 crore. Apart from financial creditors, the company has over 100 operational creditors waiting to receive their dues. Listed company Hindustan Dorr-Oliver is controlled by IVRCL that holds over 55.2% while the balance is with public. Dorr-Oliver reported losses of Rs 59.25 crore for the quarter ended December on total income worth Rs 11.77 crore.
NCLT’s Mumbai bench had ordered start of insolvency proceedings against Dorr-Oliver on April 21, 2017, and for HDO Technologies on April 28, 2017. Dorr-Oliver told the Bombay High Court before April 2017 that a restructuring and revival plan was being worked out through some prospective investors. However, that proposal did not materialise.
In January, with the deadline for resolving the insolvency proceedings nearing, the resolution professional submitted a proposal by Pennar Industries and Eight Finance for approval by Committee of Creditors. Bank of India with the largest share in the CoC and Andhra Bank told the court that their respective management approved the plan only ‘inprinciple’ but this was not accepted as the bankruptcy rules require final and unconditional approval.
Source: Economic Times