The Ahmedabad bench of National Company Law Tribunal (NCLT) on Thursday reserved its order on insolvency proceedings initiated by lender ICICI Bank against ABG Shipyard Ltd. Amidst an insolvency petition filed by another 20 unsecured creditors at the Gujarat High Court (HC), the NCLT bench asked the parties to file details of the same before the tribunal.
ICICI Bank Ltd had filed an insolvency petition against the debt-ridden ABG Shipyard Ltd under the Insolvency and Bankruptcy Code (IBC) 2016 before the NCLT’s Ahmedabad bench chaired by Justice Bikki Raveendra Babu. The tribunal will be announcing the date of pronouncement later this week.
Part of the 12 large defaulters identified by Reserve Bank of India (RBI), ABG Shipyard owes an outstanding debt of over Rs 10,000 crore. RBI has identified 12 companies as large defaulters based on the criteria of at least Rs 5,000 crore worth of debt exposure, of which 60 per cent has been termed bad by lenders.
Already, companies like Jyoti Structures Ltd and Alok Industries Ltd, among others, who are part of the 12 large defaulters, have seen insolvency proceedings being initiated against them with the NCLT benches admitting lenders’ applications against them.
The loss making ABG Shipyard Ltd has also seen a petition of insolvency being filed against it by around 20 unsecured creditors at the Gujarat HC, details of which were sought by NCLT before reserving its judgment.
Apparently, ABG Shipyard Ltd’s counsel had earlier stated that the company had not opposed the insolvency petition filed against in the Gujarat HC.
In an earlier BSE filing this month, ABG Shipyard had admitted to a “deep financial crisis”. As against a net loss of Rs 1,266.22 crore in the quarter ended December 31, 2015, ABG Shipyard had reported a net loss of Rs 822 crore for the said quarter in fiscal 2016-17.
After the company’s lenders had converted their debt into equity, ABG Shipyard had sought buyers for the 51 per cent stake of lenders. However, the company failed to attract any buyers.
If admitted by the Ahmedabad bench of NCLT, it would result in the immediate dissolution of ABG Shipyard’s Board of Directors on the appointment of an interim resolution professional (IRP).Under IBC 2016, the interim resolution professional gets 180 days to come up with a workable solution for the company so that it can repay its loans. This timeline can be extended by another 90 days. If the company failed to come up with a solution within the 270 days, a liquidator would be appointed.
The solution plan will have to be approved by the committee of creditors by a 75 per cent majority which is then filed with the NCLT.
It must be mentioned here that earlier ABG Shipyard Ltd. had admitted in its July filing on BSE that the company had defaulted on repayment of loans under the corporate debt restructuring (CDR) scheme of lenders, with the same being discontinued from March 1, 2017 onwards.
Source: Business-Standard 